Fortis Healthcare’s diagnostic chain subsidiary Super Religare Laboratories (SRL) has signed definitive agreements with investment partners, NYLIM Jacob Ballas India Fund III LLC, Mauritius (NJBIF) and International Finance Corporation (IFC) for an equity investment. NJBIF and IFC will invest Rs 2,500 million and Rs 1,200 million respectively in SRL in the form of compulsorily convertible preference shares (CCPS). The conversion of CCPS will be in the price band of Rs 201-Rs 220. Post conversion of CCPS, Fortis Healthcare will continue to hold 55-56 per cent equity stake in SRL. The transaction, subject to customary closing conditions, is expected to take place in this month itself.
As of March 31, 2012, SRL had a network consisting of eight reference laboratories, eight Centres of Excellence, 208 network laboratories, 21 wellness centres and over 1088 collection centres (including 32 abroad). SRL, apart from retiring a substantial part of the debt to deleverage the company, plans to use the proceeds of the investment to consolidate and grow the existing network. This will be the third round of private equity investment in SRL, after Avigo Capital Partners and Sabre Partners, invested Rs 1,500 million in SRL, in 2011.
Vishal Bali, Group CEO, Fortis Healthcare said, “We are delighted to have Jacob Ballas and IFC as investment partners in SRL, their interest exhibits the potential of the company as a market leader in diagnostics. We see immense opportunity for growth in the diagnostics vertical both in India and other regions of Asia. This investment will go towards our consolidation strategy to improve market share and create sector leadership. The deal is a testimony to our commitment to provide quality and cutting edge diagnostic services to our customers in India and around the world and fortifies our resolve to be the leading diagnostic services company in the country.”
Srinivas Chidambaram, Managing Director, Jacob Ballas Capital India Private, investment advisor to NJBIF, commented, “We are pleased to assist the leading management team in the diagnostic services sector in realising their vision to address the significant pan-India and regional potential in a historically “un-organised” industry, with an emphasis on quality, reliability and service. Having made significant investments in world class diagnostics infrastructure, a team of well qualified healthcare professionals and modern diagnostic techniques, SRL is ideally positioned to benefit patients, healthcare institutions and doctors nationwide.”
“IFC is partnering with Super Religare Laboratories to help the company expand its existing network of laboratories across India,” said, Thomas Davenport, Director for South Asia, IFC. “This will help provide advanced, high quality diagnostics services especially in several low income states of India, which is a key priority for IFC,” he added.
EH News Bureau – Mumbai