Diagnostics chain SRL Ltd, owned by Fortis Healthcare Ltd, said it will acquire the remaining 50% stake in joint venture DDRC SRL Diagnostics PVt Ltd for a cash consideration of Rs 350 crore ($48 million).
The transaction will help SRL consolidate its position in the southern state of Kerala, said Fortis in a statement.
It also complements SRL's strategy of scaling business-to-consumer (B2C) business and expanding product portfolio in the areas of lifestyle diseases, specialised tests and preventive packages.
The 50% stake it seeks to buy is held by joint venture partners of DDRC Group -- Ajith K Joy and Elsy Joseph.
Out of the total Rs 350 crore, SRL will pay Rs 25 crore over the course of one year from the date of entering into definitive agreements.
The transaction, which is subject to shareholders' approval, is expected to be completed by March this year.
DDRC Group started its journey under the leadership of the late Joy Joseph K at Ernakulam. DDRC SRL Diagnostics, incorporated in 2006, clocked a turnover of Rs 160 crore in FY20 as compared with Rs 143 crore in FY19 and Rs 128 crore in FY18.
SRL's gross revenue increased 22.8% year-on-year to Rs 306 crore in the December quarter. Earnings before interest, taxes, depreciation, and amortisation increased 83% to Rs 73 crore during the period.
Last year, Fortis had hired Anand K as the new chief executive officer of SRL.https://www.vccircle.com/fortis-hires-apollo-exec-to-lead-diagnostics-unit-srl/ Prior to joining SRL, Anand was based in Hyderabad leading the diagnostics business of Apollo Health and Lifestyle Ltd.
Interestingly, while peers – Dr Lal PathLabs Ltd, Thyrocare Technologies Ltd and Metropolis – have gone public in recent years, SRL’s listing has remained elusive despite Fortis having chalked out such plans earlier.
Fortis had first received approval for the amalgamation of its already listed Fortis Malar Hospitals Ltd and SRL in 2016. This would have allowed SRL to get listed without floating an initial public offering. However, the amalgamation was scrapped in June 2018, just a month before IHH won the bid to acquire Fortis.