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Goldman Sachs eyes stake in Manipal Integrated Services’s hostel business

LiveMint logoLiveMint 02-05-2017 Reghu Balakrishnan

Mumbai: Global financial institution Goldman Sachs Inc. is in talks to acquire a minority stake in Manipal Integrated Services Pvt. Ltd (MIS), which runs the food services and hostel business of the Manipal Education and Medical Group (MEMG), according to two people aware of the development.

Goldman Sachs will invest about Rs250-300 crore to acquire around 45-49% stake in the hostel business, one of them said on the condition of anonymity.

It will make the investment through its arm, Principal Strategic Investments (PSI) Group.

Last year, the facility management and catering businesses of MIS was demerged and sold to Fairfax-controlled business service provider Quess Corp. Ltd (formerly IKYA Human Capital Solutions Limited), for Rs220 crore.

IDFC Alternatives Ltd, which had invested Rs100 crore in MIS in 2012, also made an exit through the Quess deal.

MIS’s hostel business provides living facilities for more than 6,000 students on Indian campuses and 1,000-plus students overseas under the brand name Yoho.

Yoho has hostels in Bengaluru, Mangaluru, Jaipur, Pune, Sikkim, Vijayawada, Salem, Singapore, Malaysia and Dubai.

Ranjan Pai, managing director and chief executive officer of MEMG, and a Goldman Sachs spokesperson declined to comment.

“Promoters are in early discussions with a couple of leading PE funds including Goldman Sachs. It’s not sure when the deal is expected to close,” said the person cited above.

Goldman Sachs has an exposure to the hospitality space in India through investments such as its $66 million in hospitality firm SAMHI Hotels Pvt. Ltd in 2016 and $10 million in pan-Asian casual-dining chain Azure Hospitality Pvt. Ltd in 2015.

Some of its major investments include $350 million in ReNew Power Ventures Pvt. Ltd, a wind power producer; Rs900 crore ($150 million) in Piramal Realty, the realty arm of the Piramal Group; and $250 million jointly with Nitesh Estates Ltd in a real estate project.

Founded in 1953, the Bengaluru-based Manipal group runs its own hospital chain Manipal Health Enterprises Ltd and educational institutes. The Ranjan Pai-owned group has attracted many a leading global as well as domestic PE fund.

In 2015, US-based TPG invested Rs900 crore ($146 million) to acquire a minority stake.

In 2012, True North, formerly India Value Fund Advisors (IVFA), invested Rs1,000 crore ($180 million) to acquire an around 18% stake in the hospital chain.

Singapore’s sovereign fund Temasek Holdings Pte is all set to acquire an 18% stake in Manipal Health Enterprises from True North, valuing India’s third-largest hospital chain at as much as $1.2 billion (Rs7,800 crore), The Economic Times had reported in March.

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