Aster DM Healthcare (ASTERDM) Investor Presentation summary

Transaction overview and strategic rationale

• Merger of Aster DM and Blackstone-backed Quality Care creates one of India's top 3 hospital chains with 10,150+ beds and presence in 9 states and 25 cities, combining 38 hospitals and over 5,100 doctors.

• The merged entity, Aster DM Quality Care Limited, will have a revenue of INR 7,314 Cr and an EBITDA margin of 19% for FY24, with a well-diversified platform and limited overlap in hospital locations.

• The merger is cash neutral, expected to be EPS accretive from the first full year, and will be jointly controlled by Aster promoters and Blackstone, with equal board representation and strong governance.

• Transaction values Aster at 36.6x FY24 EV/EBITDA, 45% higher than QCIL's 25.2x, with post-merger shareholding of 57.3% for Aster shareholders and 42.7% for QCIL shareholders.

• Transaction closure is expected by Q3 FY26, subject to regulatory and shareholder approvals, following a two-step structure involving initial share acquisition and subsequent amalgamation.

Business profiles and operational metrics

• Aster operates 191 hospitals, 13 clinics, 232 labs, and 2,122 pharmacies, with a strong presence in South India, 5,000+ beds, and FY24 revenue of INR 3,699 Cr.

• QCIL runs 19 hospitals in 14 cities, focusing on non-metro markets, with 5,150+ beds, FY24 revenue of INR 3,615 Cr, and brands including CARE Hospitals, KIMSHEALTH, and Evercare.

• The merged entity will have 10,150+ beds, 65% occupancy, ARPOB of ~INR 39,100, and a workforce of over 26,000 employees.

• Both entities have high clinical standards, with NABH and JCI accreditations, advanced medical technology, and a track record of clinical firsts in India and South Asia.

• Expansion plans include adding 3,500 beds by FY27, funded through internal accruals, targeting a total of 13,300 beds.

Strategic benefits and synergies

• Merger delivers scale, geographic diversification, enhanced financial and operational metrics, and significant growth potential through brownfield and greenfield expansion.

• Identified synergies include revenue growth, supply chain efficiencies, integrated doctor model, lower overheads, and capex savings, with a near-term EBITDA upside potential of 10-15%.

• The combined platform strengthens value creation, maximizes efficiencies in procurement and insurance, and is expected to deliver enhanced shareholder returns.

• Backed by Blackstone, the world's largest alternative asset manager, providing global expertise and financial strength.

• High standards of corporate governance, with due diligence by leading firms and independent board representation, ensure transparency and accountability.