Fortis to enter into new healthcare verticals

12-May-2011

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.

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 specialitybased 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.”