Cash-rich Fortis eyes acquisitions in Asia

Fortis Healthcare is eyeing acquisitions of other health-care companies in Asia after losing out in the bidding war for Singapore's Parkway Holdings but making a tidy profit, its chairman said.

Malvinder Singh, one of the two billionaire brothers who run the company, said the group now has between $800-$900 million in cash and a well-established line of credit, which would be used for the acquisition of one or more assets.

"There's also family money, if need be," he said. "Money has never been an issue. It depends on the opportunity," Singh said in an interview today.

Singh refused to identify any targets or give a time frame, but said Singapore remained the pan-Asian hub for the sector.

"We have regrouped, discussed and decided what we need to do," he said. "There are a bunch of opportunities we have already identified which we will evaluate and engage with. We will look at partnerships, we look at alliances, we look at acquisitions. We will do all of that."

"We are here to stay, Singapore will remain the base," said Singh, who had moved to Singapore from New Delhi as chairman of Parkway.

Other health-care firms based in Singapore include Raffles Medical, Pacific Health and Singapore Medical. Prominent companies regionally in the sector include Thailand's top listed hospital operator Bangkok Dusit Medical Services and second-ranked Bumrungrad Hospital.

"For the next five years, Asia is the story," Singh said. "Emerging markets, significant demand-supply gaps in terms of health care, opportunity for growth and its got some strong institutions which we can build upon and leverage and create a good business."

Earlier this week, Fortis agreed to sell its about 25% stake in Parkway bought just four months ago after Malaysian state investor Khazanah made a general offer of S$3.95 per share in response to Fortis' bid of S$3.80.

Fortis said it made a profit of S$116.7 million ($85 million) on the deal.

"At S$3.80 we were clear buyers, at S$3.95 we were sellers,” Singh said.

"The issue to me was what does that (price) mean for a Fortis shareholder? What does it mean in terms of return on investment, what does it mean in terms of opportunity cost for other opportunities?"

Malvinder, whose interests include golf, photography, travel and art, worked at American Express Bank and Merrill Lynch and joined family-founded Ranbaxy Laboratories as a management trainee in 1994.

Two years ago, Singh and his brother Shivinder sold their controlling stake in Ranbaxy to Japan's Daiichi Sankyo. They now have a combined fortune estimated at $3 billion.

"Today where we are, rather than Parkway being a vehicle, we will find a different vehicle," he said. "It could be more than one vehicle. The destination doesn't change."