Fortis to buy 86% in Super Religare Labs

The board of Fortis Healthcare today took an “in principle” decision to acquire 86 per cent shares of diagnostic services chain Super Religare Laboratories (SRL) for an undisclosed sum.

Both Fortis and SRL are controlled by billionaire brothers Malvinder and Shivinder Mohan Singh. SRL is in the process of getting listed on stock exchanges, while Fortis is already a publicly listed company.

The acquisition will result in the entire promoter stake in SRL getting transferred to Fortis.

Analysts welcomed the move to expand Fortis’ healthcare service delivery platform by incorporating diagnostic business, but were non-committal on the possible impact of the acquisition on Fortis’ finances. “We see great benefit in augmenting the Fortis presence with new specialty-based verticals. The addition of diagnostics and retail dialysis will serve to enhance the quality of care to our customers,” Shivinder Mohan Singh, managing director of Fortis Healthcare, said. Fortis promoters own 86 per cent of SRL.

“It has to be seen how Fortis intends to fund this acquisition. The qualitative aspect of this deal is good, as it will add value to Fortis’ healthcare services. But at what cost to Fortis is the key question,” Rahul Gaggar, an analyst with Centrum Broking, said.

The company did not specify when it intended to carry out the acquisition. The company board also approved the setting up of stand-alone dialysis centres and foray into stand-alone and in-hospital diagnostic centres.

SRL, the country’s largest diagnostic chain, had acquired Piramal Diagnostic Services in August 2010 to become the largest radiology service provider in the country.