The big deals in Indian private equity over the last 12 months have had two common factors - Private Equity & Platforms in The Healthcare space. Whether it was the KKR-Max exit or the Advent - Suven Pharma deal or the Manipal-Temasek Deal, or the recent news of Blackstone and Cipla, a “Platform Structure” that can be used for acquisitions, cost-trimming, scale, and growth are paramount.
But what are the ramifications of this, and what lessons can investors across the value buckets learn from this for Indian investments and generating market-beating returns? How do platforms come into play, and what value can they create for businesses and investment returns?
The biggest and most successful exits in India in the coming years will use the “Buy & Build” technique that the KKR-Max deal displayed. The ability to buy a high-quality acquisitive platform and leverage both sides of the balance sheet via cost arbitrages, growth arbitrages, capital structure arbitrages, and multiple arbitrages will create growth and EBITDA Margin improvements. Regardless of the size of the platform, ranging from $100 Million to $10 Billion, investors scaling and building “platform structures” stand to win the Indian Investment Race.
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