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The Healthcare Investor Insights on Issues & Trends that Impact Investments in Healthcare & Life Science Businesses

Private Equity Investing in the Dialysis Sector – Part III (Overseas Investing)

Posted in Healthcare Services Investing

As we round out our series on private equity investing in dialysis, we note an emergence in overseas dialysis investing by U.S. investors.   Our blog typically focuses on U.S. investing but can’t help but note the interest in overseas activity.  In particular, dialysis centers look to be the next focus of private equity investing in the Indian healthcare market.

NephroLife Care (India) Pvt Ltd, a renal disease management chain founded in 2009 by Shiram Vijayakumar, has raised $25 million from New Enterprise Associates (NEA) and DaVita, Inc., one of the largest kidney health care companies in the United States. During the initial stage, the company raised $3 million from ROI Capital, a family business run by former Barclays Capital Dev Kumar Roy. This deal closely followed Bessemer Venture Partners backing of Nephroplus, a dialysis chain with plans to open 100 treatment centers. DaVita showed revenues of $6.47 billion, with a net income of $406 million in 2010.

Alliance Medicorp India is a joint venture between Apollo Hospitals and GSK Velu’s Trivitron, which runs both dialysis and dental centers. Alliance is seeking Rs 60 crore (about $13 million USD) in private equity funding. Fortis Healthcare has also announced plans to open 50 dialysis clinics by investing more than Rs 30 crore (about $6.5 million USD).

In an article on www.vccircle.com, Shiraz Bugwadia, managing director at the investment banking firm o3 Capital, states, “’Nephrology is clearly one of the single specialty themes and an attractive sub-segment in the healthcare chain. Scale and margins are good and you can cater to a large demography.’”