UAE-headquartered hospital and pharmacy conglomerate Aster DM Healthcare is set to divest a majority stake in its Gulf business to a consortium that includes a sovereign-backed private equity firm for $1.01 billion.

In a bourse filing on Tuesday, the company said that its subsidiary, Affinity Holdings, has agreed to sell its shares in Aster DM Healthcare to Alpha GCC Holdings. Affinity Holdings operates Aster’s business in the GCC.

The sale is anticipated to complete in the fourth quarter of 2024. The buyer is a consortium led by private equity firm Fajr Capital Advisors.

At the end of the transaction, the funds managed by Fajr Capital Advisors will hold 65% stake, while the remaining share will be maintained by the “promoters” of Aster India, which include Azad Moopen and Alisha Moopen, the disclosure said.

“The promoters have expressed their deep commitment to both the India and GCC geographies and shall continue to have a meaningful role both in GCC and India following the completion of the transaction,” Aster said.

Of the $1.01 billion, $903 million will be paid at the closing of the transaction, with up to $98.8 million to be received subsequently, “subject to certain contingent events”, the filing said.

“This includes an earnout of up to $70 million based on EBITDA achieved by the GCC business for the financial year ending 31 March 2024.”

Aster DM Healthcare has a portfolio of 366 medical establishments, including 27 hospitals, 115 clinics and 223 pharmacies in seven countries.

(Writing by Cleofe Maceda; editing by Seban Scaria)