Pathology chain Vijaya Diagnostic Centre Ltd has agreed to take over Pune-based PH Diagnostic Centre Pvt. Ltd in its first ever acquisition.
Mumbai-listed Vijaya Diagnostic will acquire PH Diagnostic for Rs 134.65 crore in cash and will inject an additional Rs 12.85 crore either as equity capital or debt to help the company repay its existing loans.
The acquisition is in line with the company’s objective to build a comprehensive diagnostic chain of network across different geographies and thereby increasing the market share and penetration, Vijaya Diagnostic said in a statement. The acquisition will help the company to expand rapidly and with a faster growth rate in Pune, it said.
PH Diagnostic was started by Dr. Hemanth Dhoka in 2001. It has 22 centres across Pune. Of those, three hub centres are equipped with advanced radiology equipment like MRI/CT machines, and three spoke centres can facilitate basic radiology services like ECG, X-Ray and ultrasound. It generated net sales of Rs 41 crore during 2022-23, down from Rs 49 crore the year before.
Mid-market investment bank Veda Corporate Advisors advised PH Diagnostic on the transaction.
Vijaya Diagnostic was launched in 1981 and went public in 2021. It has more than 140 centres across 20 cities, though a vast majority of the outlets are in Hyderabad. The firm employs over 200 radiologists, microbiologists and pathologists.
India's fragmented preventive healthcare and diagnostics segment is primarily dominated by standalone pathology chains. In the organised segment, Vijaya Diagnostic competes with the likes of Apollo, Metropolis, Dr Lal PathLabs Ltd, Thyrocare Technologies Ltd, and Agilus Diagnostics, a unit of Fortis Healthcare.
The segment has recorded several consolidation moves in the recent past. In June, Sterlin Accuris Wellness Pvt Ltd bought Ahmedabad-based VIP Labs. In April, Agilus acquired a pathology lab based in Delhi. In March, Redcliffe Lifetech Pvt. Ltd purchased a diagnostic lab chain, aiming to provide premium-priced health services.
In February, Molbio Diagnostics Pvt. Ltd, a diagnostics chain based in Goa, obtained a 70% stake in Prognosys Medical Systems, located in Bengaluru. Molbio had previously secured funding from Temasek Holdings, a state investment firm based in Singapore, at a unicorn valuation in September of the previous year.