Metropolis Healthcare, India’s second largest diagnostic chain, on Monday said its board has approved the acquisition of Delhi NCR-based specialty cancer testing chain Core Diagnostics for Rs 247 crore through a combination of cash and stock.
Metropolis will acquire a 100% stake in Core Diagnostics financing Rs 135.76 crores or 55% in cash and the rest Rs 111.07 through an equity swap.
Ameera Shah, promoter and executive chairperson of Metropolis told ET, that the company would fund the acquisition through internal accruals and small debt.
Shah said Metropolis had Rs 180 crore free cash on books as on September 30, 2024.
Core Diagnostics has Rs 110 crores revenue in FY24.
“This strategic acquisition will enhance Metropolis’ capabilities in advanced cancer testing, while deepening its presence in Northern and Eastern India and driving market share expansion in the specialized segment across the country, ” Shah said.
Shah added that the acquisition of Core will see oncology testing contribution to rise from 4% to 10% of revenues.
The Indian cancer market is rapidly growing and is expected to expand at a CAGR of 17.5% from 2023 to 2028. This growth, driven by rising cancer incidences, technological advancements, improved healthcare access, and increased awareness,
The acquisition is expected to be completed within 60 days.
Core Diagnostics operates in 200 cities in India, with a CAP-accredited laboratory in Gurugram, backed by a regional reference lab in Hyderabad and seven satellite labs across India. Core Diagnostics offers over 1,300 high-end tests, with a primary focus on cancer, serving more than 6,000 specialty prescribers, including over 1,600 top cancer specialists.
Alivio Advisors served as the exclusive financial advisor to Metropolis Healthcare Limited. Saraf & Partners acted as legal advisors, while PwC conducted financial due diligence.
Source: Economic Times