Life Healthcare to Almost Double Max Stake to Raise India Profit

Life Healthcare Group Holdings Ltd. (LHC), South Africa’s second-largest private hospital operator, will almost double its stake in Max Healthcare Institute Ltd. of India to boost profit outside its home market.

The company will spend about 1.35 billion rand ($128 million) to increase its shareholding to 46 percent from 26 percent, Johannesburg-based Life Healthcare said today in a statement. The deal will include an issue of new Max shares to help reduce debt and fund expansion, while the medical group will also buy stock from fellow investor Max India Ltd. (MAX)

“India is an important market for the company’s international growth strategy,” Life Healthcare said. The hospital operator is “confident in the quality of the asset in terms of infrastructure, clinicians and the ability of management to deliver on the business plans.”

The company is trying to increase profit in India and Poland after selling out of Durban, South Africa-based Joint Medical Holdings in February. It bought a majority stake in Scanmed Multimedis of Poland in April. Mediclinic International Ltd. (MDC), South Africa’s largest private hospital operator, is also expanding overseas through operations in Switzerland and the United Arab Emirates.

Life Healthcare will fund the acquisition by raising debt, it said. The shares gained 1.8 percent to 44.70 rand as of the close in Johannesburg, the highest since the initial public offering in June 2010.

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net John Bowker, Robert Valpuesta

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