INDIA – Metropolis Healthcare Ltd., a diagnostics chain with operations in India and Africa, is looking to raise more than US$300 million and attract strategic partners by selling a large minority stake, Bloomberg has reported.
Metropolis, which is traded in Mumbai, has a market value of US$1.1 billion, which is roughly half of what it was at the start of the year, and they have hired Barclays as an adviser.
The transaction could be worth more than US$300 million if existing investors, including the managing director, sell primary and secondary shares.
It is reportedly said that Walmart Inc. retailer Flipkart and publicly traded healthcare chain Apollo Hospitals Enterprise Ltd. are potential strategic investors in a nondisclosure agreement with Metropolis, while Amazon.com Inc has had preliminary discussions.
Deals have also been signed with global funds such as KKR & Co., TPG Inc., and Barings, and discussions with Blackstone Inc. are ongoing.
Metropolis has more than 3,000 diagnostic centres and pathology laboratories in India and Africa.
It has grown in popularity as consumers seek out brand operators to test and scan for the pandemic. Sushil Shah founded the chain in 1981, and his daughter Ameera Shah now runs it.
Ameera Shah currently owns 50% of the company and may sell some of her stake in a secondary deal that could increase the size of the deal.
Amazon and Walmart have targeted the diagnostics chain as they expand their retail offerings in India by adding healthcare products.
The country of 1.4 billion people is spending more on preventive health care, such as testing, as a result of chronic and lifestyle-related diseases, as well as an aging population.
Consolidation is being driven by fierce competition, with online pharmacy startup PharmEasy purchasing a majority stake in publicly traded diagnostics chain Thyrocare Technologies for US$612 million last year.
Last year, Metropolis paid 636 million rupees (US$82 million) for the diagnostics chain Hitech Diagnostics Centre.
Diagnostic companies must invest heavily in newer technologies and equipment, as well as improve their online offerings, in order to remain competitive.
Despite the market price shock, Metropolis stated that it was focused on expansion. In an exchange filing, the company stated that it intends to open 1,800 collection centers over the next three years.
In its most recent earnings report in February, the company stated that it would expand its home collection service to 200 locations within two years.
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