PharmEasy acquires Thyrocare at Rs 4,546 crore

PharmEasy on June 25 acquired a 66.1 percent stake in Thyrocare Technologies Ltd (Thyrocare) for a consideration of Rs 4,546 crore.

The deal was announced after the market hours on Friday. Shares of Thyrocare rose 6.23 percent to end at Rs 1448.05 on BSE.

API Holdings Ltd (API), the parent company of PharmEasy, announced the "signing of definitive documents to acquire 66.1 percent stake in Thyrocare from Dr A Velumani and affiliates at a price of Rs 1,300 per share aggregating to Rs 4,546 crore," an official statement noted.

"We will provide a world-class customer experience in diagnostics, rivalling our pharmacy experience by leveraging technology, and building on top of the massive scale & truly pan-India presence of Thyrocare," said Siddharth Shah, CEO of API Holdings.

Analysts say COVID-19 testing, which is seasonal, could be the reason for elevated valuations of diagnostic. COVID-19 testing contributed about a quarter of revenues for the diagnostic companies in FY21.

"Thyrocare relies heavily on the B2B (business to business) segment, where much of its business comes from referral of hospitals, clinics and doctors, the realisations are lower. It is mostly a model of low pricing/high volume," Randeria said. Thyrocare revenues grew 14 percent to Rs 494.62 crores in FY21, with a net profit of Rs 113 crore and an EBITDA of 37 percent.

The Indian e-health sector is expected to become a $16 billion opportunity by the financial year 2025, growing from $1.2 billion at a compounded annual growth rate of 68 percent, according to RedSeer.