Metropolis Healthcare To Acquire Core Diagnostics For Rs 247 Crore

Metropolis Healthcare Ltd. will acquire Core Diagnostics for a total sum of Rs 246.8 crore, according to an exchange filing on Monday.

The laboratory chain operator’s board had on Monday approved the proposal to acquire 100% stake in the Delhi-NCR-headquartered Core Diagnostics via a combination of cash and stock, the filing added.

While 55% of the transaction will be executed via cash, 45% will be undertaken through an equity swap. However, the filing added that the equity issuance is subject to approval by the shareholders.

The acquisition, which is expected to be completed within 60 days, will make Metropolis Healthcare India’s leading cancer testing company, a press release stated.

Ameera Shah, promoter and executive chairperson of Metropolis Healthcare, said, “We recognise the significant potential of the rapidly growing Indian Oncology (cancer) market, which is expected to expand at a CAGR of 17.5% from 2023 to 2028. This growth, driven by rising cancer incidences, technological advancements, improved healthcare access, and increased awareness, presents a substantial opportunity for Metropolis to truly support the Indian patients with access to world class diagnostics.”

She asserted that with approximately 1.4 million new cancer cases and a million deaths annually in India, “there is a critical need for advanced cancer testing nationwide”.

The move will enable Metropolis to advance its cancer testing capabilities and deepen its presence in northern and eastern India, Chief Executive Officer Surendran Chemmenkotil said.

The acquisition "provides an opportunity to connect with leading hospitals in these regions. It enables us to cross-sell Metropolis' comprehensive range of tests and services while offering Core’s advanced cancer testing to our existing customers", Chemmenkotil added.

Core Diagnostics has a state-of-the-art NABL and CAP-accredited laboratory in Gurugram and is also backed by a regional reference lab in Hyderabad and seven satellite labs across India.

It had earned revenue of Rs 110 crore in fiscal 2024 via its operations across 200 cities in India. The advanced diagnostic testing provider, previously owned by private equity companies, has achieved approximately 22% revenue CAGR over the past three years.

Dinesh Chauhan, CEO of Core Diagnostics, called the development, a “new chapter” that “is both exciting and deeply meaningful”, because Metropolis’ reach and expertise will enable his company “to take a bigger leap, touching more lives and making a lasting difference in healthcare”.

For the deal, Metropolis Healthcare’s exclusive financial advisors were Alivio Advisors, while Saraf & Partners gave them legal advice, and PwC conducted financial due diligence.

Shares of Metropolis Healthcare Ltd. closed 2.39% higher at Rs 2,187 apiece on the BSE, compared to a 0.25% decline in the benchmark Sensex.