In-principle approval by Board to acquire strategic stake in Super Religare Laboratories Ltd and introduce free-standing Dialysis centres
Fortis Healthcare (India) Ltd, India’s fastest growing chain of hospitals, has received an in-principal approval from its Board of Directors in its Meeting held today, to acquire ~86% stake in Super Religare Laboratories Ltd (SRL): one of India’s largest and leading diagnostic services companies, offering diagnostic testing (including Pathology and Radiology), preventive care testing and clinical research trial testing.
Fortis Healthcare (India) Ltd, now in its tenth year of operations, has grown to become a pan India Company with the clear objective of being an integrated Healthcare player. In its current phase of growth, Fortis is focused on ‘Medical Inclusion’, which would mean more comprehensive healthcare services that extend beyond India’s metros, into the smaller cities. Besides the stated target of at least 25 hospitals in India’s tier-II and tier-III towns over the next two years, Fortis is adding new verticals focused on medical specialities.
In addition to the two recently launched verticals, C-Doc for Diabetes & Metabolic diseases and Stem Cell therapy centres, the Board in its meeting approved the setting up of standalone Dialysis centres and a foray into standalone & in-hospital Diagnostic centers. The in-principle approval to acquire stake in SRL is a step in this direction.
SRL has an ever expanding network presently consisting of 8 reference laboratories, 7 Centres of Excellence, 181 Network Laboratories (164 pathology, 17 radiology), 15 Wellness Centres and 888 Collection Centres (including 23 abroad). During the financial year 2011, SRL served over 5.6 million customers* and performed approximately 34,000 diagnostic tests per day*. It provides routine (hematology and chemistry), specialized (histopathology, immunohistochemistry and cytogenetic) and esoteric tests (molecular assays and flow cytometry). It acquired Piramal Diagnostic Services Pvt Ltd (PDSPL) in August 2010 to strengthen its presence in the Radiology services and now is the largest Radiology service provider in the Country.
Earlier during February 2011, SRL has filed its Draft Red Herring Prospectus with Securities Exchange Board of India (SEBI) for a Public issue of 28 Million Equity shares (face value Rs. 10 each) for cash at a premium to be determined at the time of bid opening. The document is awaiting comments from SEBI.
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Commenting on this acquisition, Mr. Shivinder Mohan Singh, Managing Director, Fortis Healthcare (India) Ltd. said, “We see great benefit in augmenting the Fortis presence with new speciality-based verticals. The addition of Diagnostics and retail Dialysis will serve to enhance the quality of care to our customers. Most importantly, the new structure is a meaningful step toward Medical Inclusion in India and will help us offer value-based medicine. This will better enable Fortis to deliver comprehensive and quality healthcare, with end to end service; thus taking us a step closer to our goal of reliable, affordable and accessible medical services for all.”
About Fortis Healthcare (India) Limited
Fortis Healthcare (India) Limited is committed to clinical excellence and patient-centric healthcare, which is manifest in hospital design, patient services, medical programmes and the compassionate approach of medical and non-medical hospital staff. Fortis commissioned its first hospital in 2001 at Mohali, near Chandigarh, and has expanded its operations to become a network with an over 8,000 bed capacity across 56 hospitals (includes 7 projects in pipeline). The Fortis network has a large number of international accreditations, including four JCI (Joint Commission International) and seven NABH (National Accreditation Board for Hospitals) certifications. The network’s capability covers multi-speciality hospitals and super-speciality centres that provide tertiary and quaternary healthcare to patients in the major medical specialities.
About the Indian Diagnostic Industry
According to a report published by ICRA Management Consultancy Services Limited (IMaCS), the Indian diagnostic Industry is expected to grow at a 28% CAGR over 2009–2015, from Rs 59.1 billion to Rs 254.4 billion. In 2009, diagnostic revenues comprised of pathology Rs 41.1 billion (70%) and radiology Rs 18 billion (30%). Within the diagnostic space, according to the report, the Pathology Laboratory revenues are expected to grow at a CAGR of 28% over 2009–2015 and Radiology Laboratories at a CAGR of 26.5% over the same period.
* Updated since Draft Red Herring Prospectus filed on February 17, 2011
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