WestBridge consortium to acquire Star Health



Chennai: a consortium consisting of WestBridge Capital, billionaire investor Rakesh Jhunjunwala and Madison Capital has agreed to take over the largest health insurance company in India, Star Health and Allied Insurance. The deal size of the acquisition was not formally disclosed, but is estimated at about $ 1 billion.

TOI reported this year for the first time on June 4 that the combination WestBridge and Jhunjhunwala led the race to buy Star Health. This is the largest M & A bet from ace-share market investor Jhunjhunwala to date. He diluted a little more than 1% stake in Titan and raised about Rs 850 crore, which was used for the acquisition of Star Health. WestBridge is one of India's largest private equity investors that manages assets valued at more than $ 2.5 billion.

All existing shareholders, including the ETA group and private equity investors, ICICI Venture, Tata Capital, Sequoia and Aois Partners, have, among other things, unloaded their bets. The country's first independent health insurance company is the idea of ​​V Jagannathan, former head of the United India Insurance of the state. The incumbent management team led by Jagannathan continues to lead the company under the leadership of new investors.

WestBridge and Jhunjhunwala led consortium piped bidders ICICI Lombard and Prudential and PremjiInvest combine to close the deal. "We believe that the retail health insurance industry will continue to grow at a healthy rate over the next decade as a result of increasing penetration, which is in line with WestBridge's investment philosophy and long-term horizons," said Sumir Chadha, co-founder and managing director of WestBridge Capital.

Star Health is the market leader with a share of 10.6% of the Rs 34,000-crore health insurance market, which grows by more than 25% on an annual basis. Jhunjhunwala said: "The management of Star Health has built up its leading position in private health insurance through innovation, perseverance and excellence." Star Health CMD Jagannathan said: "We have started from a modest start and have reached this level with excellent teamwork and we feel new investors, with their abundant experience, enable the company to reach further heights." Star Health, established in 2006, employs more than 11,000 people providing cover for one crore-life on 31 March 2018.

Kotak Investment Banking, Evercore and Mizuho Securities acted as financial advisors to Star Health and its shareholders, while Nishith Desai Associates and Trilegal acted for the buyers and Platinum Partners acted for the company.


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