Fortis-Wockhardt : The deed is done

habil_khorakiwalaSo after months of wrangling and ‘will he won’t he’  Habil Khorakiwala has sold off his prized possessions. Wockhardt Hospitals will soon divest 10 hospitals to Fortis Healthcare for Rs 909 crore, which works out to a valuation of 8.5 times FY09-010 estimate EBITDA and 1.9 times estimated revenues. While it still retains some hospitals, Malvinder Mohan Singh, chairman, Fortis announced in no uncertain terms that what it has acquired comprises roughly 85 per cent of turnover and EBITDA of Wockhardt Hospitals. This brings Fortis a step closer to its stated ambition of 6000 hospital beds by 2012.

But it leaves Wockhardt Hospitals a lot worse than when it started off. For one, it loses two of its biggest hospitals in Mumbai and Bangalore respectively and a number of others in cities such as Kolkata. It also loses a 12-man strong management team led by CEO Vishal Bali who will move over to Fortis with the hospitals.

Habil Khorakiwala, chairman, Wockhardt Hospitals still wants to grow what remains and has plans of adding hospitals in Mumbai, Madhya Pradesh, and Bihar.  Will he manage with a far weaker organisation as also the top tranche of Wockhardt management packing up? Apothecurry is sceptical.


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