PharmEasy, one of the popular online pharma companies, plans to extend its operations by acquiring a majority stake in Thyrocare, the leading diagnostic center chain in India. As per the internal reports, the discussion is in the last stage and the deal will be announced soon.
About Current Deal
API Holdings, the parent firm of PharmEasy is on an acquisition spree. Recently, it acquired Medlife, and now the firm is in advanced talks to acquire Thyrocare. As per the internal person who did not reveal his identity, the deal amount is approximately Rs 7000 crore.
In recent years, Thyrocare did not get expected growth. Financial experts believe that Thyrocare owner Dr. A. Velumani thought to sell the firm due to rewarding valuation and slow growth.
Once the deal is closed, Velumani is expected to invest in API Holdings. Thyrocare promoters will also sell their stake to shareholders. Currently, the promoters have over 66% stake at the end of the financial year 2020-21.
API Holdings is planning to raise $1.2 billion from its proposed IPO. Thyrocare already started its IPO in 2016 with a market cap of Rs 3300 crore. Thyrocare share value has reached Rs 1300 and grew Rs 300/share in June 2021. After the current deal news became public, Thyrocare share saw a further jump of 1.4% to Rs 1315/share.
Since API Holdings is planning an IPO for PharmEasy and Thyrocare is already has a public offering, so API will be the owner of two listed companies very soon.
Tough Competition in Online Pharma Sector
The current deal will not only strengthen the PharmEasy operations but will also help the startup to compete against NetMeds and 1mg.
NetMeds is now a subsidiary of Reliance Retail and the latter is looking to establish itself in the digital pharma sector. On the other hand, Tata Digital is on an acquisition spree to expand its operations in the digital consumer sector. Tata Digital has recently bought the major stake in 1mg, the direct competitor of PharmEasy.
Currently, API Holdings has the target competition with the two business giants- Reliance and Tata Group.
To make its IPO a grand success, API Holdings has been reinforcing its portfolio ahead of the IPO. The last purchase of Medlife has already ranked PharmEasy number one among online medicine delivery platforms.
Thyrocare is known for its pan-India diagnostic chain. It helps Indians by early detection and controlling the diseases to avoid major damage. The current deal will allow PharmEasy to enter the diagnostic chain market and will expand its portfolio further.