INDIA – PharmEasy an Indian pharma startup with a unicorn status is acquiring 66% stakes in diagnostics chain Thyrocare technologies valued at around Rs 4500 crore (US$606.6m) as it strives to bolster its online drug logistic business.

PharmEasy parent company API Holdings signed a definitive agreement to acquire a 66.1% stake in Thyrocare for Rs 4,546 crore, according to an exchange filing made on Friday, the first acquisition of a listed company by an Indian unicorn.

PharmEasy has a user base of 12 million, a network of 6,000 digital consultation clinics and 90,000 partner retailers across the country and it currently serves the pharmacy and diagnostic needs of more than 1 million patients.

Thyrocare is India’s leading diagnostics solution provider by volume with more than 110 million tests performed annually and is the largest B2B player in the diagnostics space having a network of 3,330 collection centres in 2,000 Indian towns.

The deal will see Docon Technologies, a 100 % subsidiary of API acquire the stakes and make an additional open offer of 26% as A Velumani, an affiliate and promoter of Thyrocare will sell their stake at Rs 1,300 (US$17.5) per share which rose by 6.2% on the Bombay Stock Exchange (BSE).

As part of the transaction, Velumani will also be investing close to Rs 1,500 crore in API Holdings for a 5% stake, according to the exchange filing pegging PharmEasy’s valuation at $4 billion, up from $1.8 billion at the last round of investment.

The PharmEasy-Thyrocare transaction comes at a time when India’s online pharmacy space is witnessing a wave of consolidation—the Tata-1mg deal, Reliance buying Netmeds and PharmEasy itself purchasing Medlife ahead of a potential IPO.

A report by Research and Markets concluded that Indian e-pharmacy market is representing the trends that is expected to deliver a transition in the mindset of the local population about the perspective of online availability of the drugs.

The report further highlighted that the market opportunity of the e-pharmacy industry is expected to grow by up to US$4bn in 2025 even though it is at its nascent stage currently.

At the moment, diagnostics accounts for about 5% of PharmEasy’s total annual sales; the acquisition will help bulk this up as the business generates higher margins than medicine delivery.

“This deal brings together India’s leading digital health platform and one of the most cost-efficient diagnostics solution providers to create an unbeatable integrated digital health platform,” said Vishal Kampani, managing director, JM Financial Group (API Holding’s Mergers and Acquisition advisors).

“This partnership will create tremendous opportunities and synergies for the entire ecosystem of consumers, doctors and suppliers in the Indian healthcare sector.”