ARCAPITA SALE OF INDIAN RETAIL INVESTMENT EXCEEDS TARGET RETURNS BY MORE THAN 60%
April 10, 2011 –After a holding period of 3 years, Arcapita Bank B.S.C.(c) has completed the sale of MedPlus Health Services, an Indian healthcare company providing diagnostic services and wholesale distribution of pharmaceutical products, to a consortium of private equity investors. Arcapita became the largest shareholder in MedPlus in November 2007 in a transaction that valued the company at INR 2.9 billion (USD $72 million).
Arcapita acquired its stake in MedPlus as part of its strategy to develop a private equity portfolio in the high growth Indian market, and this is the first exit from that portfolio. During the holding period, the number of stores grew by 350% to 800, revenues grew 5-fold and gross profit increased 6-fold.
Atif A. Abdulmalik, Arcapita’s Chief Executive Officer said, “During 2007, we began to source and develop private equity investments in India, adding further diversity to our investment portfolio, and offering our investors exposure to one of the fastest growing global economies. Generally, India has continued to grow steadily through the downturn, and we are pleased that this has been reflected in the performance of MedPlus since acquisition.”
Since acquisition, the MedPlus brand has expanded its presence into 5 states in India and increased from 230 stores to 800 at exit, benefiting from innovative loyalty programs and a private label product that has driven margin improvement across the business. “We’ve worked closely with the management team to develop the scale of the business and to expand geographically, succeeding in simultaneously growing revenue and improving margins,” said Ranjeev Bhatia, head of Arcapita’s India and Middle East focused private equity group.
Arcapita maintains a positive outlook on India as an attractive investment environment. “Throughout India, we continue to see opportunities in each of our asset classes of private equity, real estate and infrastructure. We are investing further resources to develop our business there and to satisfy what we believe is growing investor demand for high quality Indian investments,” added Mr. Abdulmalik.
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