Narayana Hrudayalaya (NH) M&A Announcement summary

Deal rationale and strategic fit

• Entry into the mature U.K. healthcare market, leveraging experience from international operations and targeting a stable, developed sector with long-term growth potential.

• Diversifies international revenues and capitalizes on the U.K.’s shift toward day care procedures and private pay models.

• Practice Plus Group Hospitals was chosen for its optimal size, strong management team, and potential for operational improvement, with stable NHS relationships.

• The acquisition aligns with a strategy to replicate operational efficiencies achieved in the Cayman Islands on a larger scale.

• The U.K. private healthcare sector is underpenetrated, with private spend at 16-17% of total health expenditure, offering significant headroom for growth.

Financial terms and conditions

• 100% of the target acquired for approximately GBP 183 million, representing a 9.2x FY25E EV/EBITDA multiple.

• GBP 150 million of acquisition debt at SONIA +200 bps, with GBP 40 million equity funded from the Cayman balance sheet; no India balance sheet cash used.

• Acquisition of only the hospitals division, on a debt-free basis, with the seller repaying existing term loans.

• All-in cost includes a 4-5% deal cost for diligence, stamp duty, and legal fees.

• Post-IFRS FY25 EBITDA for the acquired business is GBP 29 million.

Synergies and expected cost savings

• Plan to implement proprietary technology (Athma platform) and new clinical offerings to streamline operations, reduce administrative overhead, and improve throughput.

• Operational efficiency and cost structure improvements are expected to drive margin expansion and faster cash conversion.

• Asset-light, day care-focused model supports lower volatility and scalable growth.

• No immediate need for additional doctors or infrastructure; growth to be driven by technology and process enhancements.