Metropolis Healthcare Ltd (NSE: METROPOLIS | BSE: 542650) - a leading diagnostic service provider today announced that the Company has completed the acquisition of Dr. Ganesan's Hitech Diagnostic Centre Pvt. Ltd. (Hitech) along with its subsidiary Centralab Healthcare Services Private Limited.
Key Highlights of the Acquisition:
Key Financial Highlights of Hitech Diagnostic Centre
- Metropolis has acquired 100% equity of Dr. Ganesan's Hitech Diagnostic Centre Pvt. Ltd. & its subsidiary Centralab Healthcare Services Private Limited in all cash deal for Rs. 636 Crores
- Acquisition has been funded through internal accruals and Debt of Rs. 300 Crores.
- Dr. Ganesan, Promoter and Founder, will be part of the Leadership team for next few years to enable a smooth transition and integration with Metropolis.
- Metropolis will get access to 31 laboratories including 3 NABL and ICMR accredited laboratories and 68 collection centres of Hitech.
- FY21 Revenue stood at ~Rs. 124 Crores, up by ~49% YoY. Business momentum continues in FY22 with strong growth across all parameters
- The EBITDA margins were upwards of 40% in FY21 owing to scale benefits. In pre-covid, EBITDA margins were around 28%-30% on sustainable basis
- Non-Covid revenue contribution in FY21 stood at healthy ~60%. Non-Covid Revenues have crossed pre-covid levels thus far in FY22
- The Company enjoys superior ROCE profile of upwards of 30% in last few years; better than most regional players on back of its high quality B2C business and leadership position across its cities of presence
"I am pleased to share that we have successfully completed the acquisition of Hitech Diagnostic centre. In line with our growth strategy, this acquisition will enable Metropolis to gain market share, strengthen our leadership position in South India market and increase the B2C share of the business. This acquisition will also enable Metropolis to cater to mid segment of the market and leverage scale benefits. Our M&A strategy revolves around acquiring high-quality, profitable B2C businesses with a scientific approach to diagnostics. We will continue to evaluate such high-quality profitable and scalable opportunities and take a pragmatic view on M&A." Ameera Shah, Managing Director, Metropolis Healthcare Ltd.
"I am very pleased to be joining the MHL family and believe there is a big opportunity to serve the people and grow Hitech under MHL umbrella. We share similar business ethos as Metropolis with focus on quality, accuracy, and highest level of customer service. I look forward to work closely with the MHL team for the smooth transition." Dr. SP. Ganesan, Promoter, Dr. Ganesan's Hitech Diagnostic Centre Pvt. Ltd.
Strategic Rationale of the Acquisition:
- Strengthening the Leadership Position - With the acquisition of Hitech Diagnostics, Metropolis will strengthen its position as 2nd largest Diagnostics company in India and largest brand in South and West India.
- Increased B2C Contribution in Focus Cities - Hitech, being a focused B2C player with 65% revenue contribution from B2C business will allow Metropolis to increase its B2C business in focus cities of Chennai and Bengaluru enhancing our direct to customer business.
- Deeper Penetration in mid-segment of the market - Metropolis being focused on the premium end of the market will get access to mid-segment of the market which Hitech primarily caters to expanding the addressable market size for Metropolis.
- Enhance Profitability through revenue and cost synergies - Enhance revenue through product offering of the combined business, improved customer experience and achieve cost synergies through optimization of operational costs in the areas of procurement, better efficiencies in supply chain, administration and support resource, laboratory network and back-office infrastructure.
Shares of Metropolis Healthcare Limited was last trading in BSE at Rs. 2826.50 as compared to the previous close of Rs. 2858.55. The total number of shares traded during the day was 64468 in over 3849 trades.
The stock hit an intraday high of Rs. 2915.45 and intraday low of 2782.00. The net turnover during the day was Rs. 182730866.00.