The healthcare market in Africa is estimated at $15 billion, while its diagnostics market stands at $1-1.5 billion a year.
Metropolis is already present in Sri Lanka and the United Arab Emirates. Its revenue is pegged at Rs 450 crore.
Ameera Shah, managing director and chief executive of Metropolis Healthcare, said, “Africa is still a virgin market for diagnostics business and has huge growth potential. With the launch of more hospitals, the healthcare sector is picking up fast in Africa. We plan to tap the diagnostics market with our hub-and-spoke model.”
After the buyouts, the company would test 70-80 per cent of the samples at its collection centres in the African markets, while the rest, which need detailed studies, would be sent to India. Shah said the company was in talks with many diagnostic chains with revenues of $1-$5 million. For the buyouts, the company is likely to pay about twice its sales.
“Cultivating a brand in new markets is not easy in this space. Therefore, we prefer buying out existing well-known chains,” Shah said.
SRL Diagnostics, another Indian diagnostics chain, has laboratories in Tanzania and Nigeria.
Shah said this financial year, Metropolis was eyeing four to five buyouts of laboratory chains in India. It would consider laboratories with revenues of $1-20 million. She added the company’s management didn’t have any immediate plan for floating an initial public offering.
“We will make funding through internal accruals,” she said. In 2010, private equity firm Warburg Pincus had invested about $85 million into the company.
EXPANDING FOOTPRINT
Mission Africa
- Metropolis plans to enter East Africa through Nairobi and West Africa through Lagos
- In talks with diagnostic centres with revenue of $1-5 million
- It is likely to pay about twice its sales for the buyouts
- It is eyeing four to five buyouts in 2013-14, with each lab having revenue of $1-20 million