Super Religare Laboratories Acquires Piramal Diagnostic Services in $129 million deal
Pathology and clinical laboratory testing in India is poised to undergo ongoing consolidation as the pace of merger & acquisition activity increases. One sign of this trend is last month’s acquisition of the pathology business of Piramal Healthcare Limited by Super Religare Laboratories Limited (SRL).
In a deal valued at US$129 million, Super Religare Laboratories purchased Piramal’s pathology and radiology diagnostic services subsidiary, called Piramal Diagnostic Services Private Limited. Announced on July 14, 2010, Super Religare Laboratories said this acquisition will give it one of India’s largest pathology and clinical laboratory testing networks.
After combining the two businesses, Super Religare will operate 185 laboratories. It will have 1,500 patient collection centers that serve 12 million patients per year. Further acquisitions are planned by SRL.
In a published interview, SRL CEO Sanjeev Chaudhry stated that “The combined entity will have 185 labs across India. While SRL had a pan-India presence on its own in pathology services, the acquisition has brought in similar strengths in radiology services, making us a truly integrated laboratory services provider in the country. We are the biggest player [in India], with annual revenue of over Rs 400 crore [US$86.6 million].”
More lab acquisitions are planned. Chaudhry noted “SRL will add another 25 laboratories from the SRL side by September, significant even from a global perspective. …On average [we] have been adding one laboratory each to our network every month over the past three years. And, one collection centre is being added every day for the past three years.”
Chaudhry pointed out that there more than 50,000 pathology and diagnostic labs in the country, but only 200 laboratories in India are accredited and SRL operates 40 of those. “Thus, we have a significant presence in the quality-accredited lab service business. We are also the fastest growing lab chain,” he explained.
Fortis Healthcare, Ltd, the parent of SRL, has told the investment community that it plans to list and sell shares in Super Religare Laboratories sometime in 2011. Fortis is owned by a pair of billionaire brothers, Malvinder Singh and Shivinder Singh.
There are other competitors for pathology services in India. One is Dr. Lal PathLabs Pvt. Ltd., with headquarters in Delhi. It was founded in 1949 and has laboratory facilities accredited by the College of American Pathologists (CAP). The company predicts that, because of ongoing expansion, it will have 75 labs by 2011. Dr. Lal Pathlabs has also announced plans to list its shares and sell them to the public within the next 24 months. One of its investors is Sequoia Capital, which paid approximately US$108 million to buy a 30% stake in the pathology company in 2005.
One of the newer players in India’s pathology market is Quest Diagnostics Incorporated (NYSE:DGX). In recent years, Quest Diagnostics built and staffed a 65,000 square foot laboratory near Delhi. Paul L. Rust, a veteran clinical laboratory executive from the United States, is the Vice President and General Manager of Quest’s business operations in India.
Pathologists and clinical laboratory managers in North America and Europe may want to pay closer attention to development of the pathology testing industry in India, for several reasons. First, all the requirements needed for a private sector roll-up of the nation’s 50,000 or more independent pathology laboratories are in place. Mergers and acquisitions of pathology testing companies in India are likely to become a dominant trend in coming years.
This would mirror the private sector consolidation of pathology and clinical laboratory testing companies which took place in the United States and Australia during the 1990s, where pathology and clinical testing was a vibrant marketplace, but highly fragmented with many small, local laboratory businesses. At some future point, in the final stages of its own pathology consolidation trend, it is likely that India would end up with just a handful of private pathology companies dominating the marketplace.
Second, Dark Daily has often called attention to the globalization of laboratory medicine. In no region of the world is this happening faster than in than the region to the East and West of India. A growing number of pathology companies in Australia, Malaysia, Singapore, and India are actively operating in multiple countries, including Arab countries in the Gulf. Because of the sheer size of India’s population, along with its fast-growing economy, some experts predict that it will be this country that births the next generation of international pathology super-corporations.
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Fortis Escorts is a Heart Institute from Delhi. They provide personal care to patients by providing regular heart health checkups, pulmonary test, heart dialysis, heart mri. We have well experienced cardiac surgeons and pediatric heart surgeons.
ITS GOOD THING. BUT THESE RELIGARE LAB FRANCHISE FROM JALGAON (MAHARASHTRA) IS GIVING COMMISSION TO DOCTORS TO INCREASE HIS LAB TO LAB LOAD AND NOW DOCTORS ARE SENDING SAMPLE TO HIM BY SAYING LOCAL PATHOLOGISTS RESULTS ARE NOT GOOD. THOUGH RELIGARE IS VERY BIG LAB AND THEY HAVE TO EARN BUT THIS IS NOT FARE. IF THIS LAB PEOPLES ARE REALLY GOOD, THEN THEY WILL TAKE ACTION AGAINST SUCH NON-MEDICAL BUSINESSMAN IN JALGAON.