New Delhi, Jan 18 (IANS): Metropolis Healthcare, a leading diagnostic service provider announced that the Board of Directors has approved the acquisition of Dr. Ganesan's Hitech Diagnostic Centre Pvt. Ltd. (Hitech).
Metropolis will acquire 100 per cent equity of Dr. Ganesan's Hitech Diagnostic Centre Pvt. Ltd. in a combination of cash and stock deal. The entity is a debt free company.
Cash consideration will be Rs 511 crore and Metropolis will issue up to 4,95,000 equity shares of Face Value Rs 2/- each on preferential basis, subject to shareholders approval, to the Promoter Group of Hitech. The Cash consideration will be funded through internal accruals and Debt of up to Rs 300 crore.
Dr. Ganesan, Promoter and Founder, will be part of the Leadership team for the next few years to enable a smooth transition and integration with Metropolis.
The acquisition will allow Metropolis to increase its B2C business in focus cities of Chennai and Bengaluru and benefit through optimisation of operational costs in the areas of procurement, supply chain, administration and support resource, laboratory network and back office infrastructure. It will further allow Metropolis brand to make deeper inroads in different customer segments across key markets in South India.
Metropolis will get access to 31 laboratories, including 3 NABL and ICMR accredited laboratories and 68 collection centres of Hitech. This acquisition is expected to be completed within three months.
L&L Partners represented as Legal advisors and PWC carried out due diligence for the buyer. Vipin Palrecha represented as Financial advisor and VB Legal as Legal advisor to the sellers.
"In line with the strategy to grow, gain market share and increase B2C revenues in focus cities, we are acquiring Hitech Diagnostic Centre which will strengthen our leadership position in the South India market. Our objective with the acquisition is to increase our market share in focus cities of Chennai and Bengaluru and become leaders in some tier 2 towns in South India.
"We will capture the mid-segment of the market, increase our B2C revenue contribution and leverage scale benefits through cost synergies. Metropolis enjoys a good track record of turning its acquisitions to strong and sustainable business and we aim to replicate the same. Hitech is built by Dr. Ganesan on the ethos of good quality and service levels, similar to Metropolis, and enjoys a strong brand equity of over 3 decades," said Ameera Shah, Managing Director, Metropolis Healthcare Ltd.