BENGALURU: India’s biggest digital healthcare deal was struck over a masala chai chat between 32-year-old Siddharth Shah, co-founder and CEO of API Holdings (parent company of PharmEasy), and 62-year-old diagnostic services veteran Dr Arokiaswamy Velumani in monsoon-drenched Lonavala, a Mumbai suburb. The rare deal will see the six-year-old unicorn PharmEasy acquire a 66.1 per cent stake in the 26 year-old public listed diagnostic firm Thyrocare—for Rs 4,546 crore ($600 million).
“We will provide 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. It is our aim to deliver all outpatient healthcare products & services to every Indian within 24 hour,” said Shah in a statement on Friday..
PharmEasy has also announced an open offer for the acquisition of 26 per cent of voting share capital, for a total consideration of Rs 1,788 crore from public shareholders. Upon the approval of the transaction, as well as open offer subscription, PharmEasy will have a consolidated stake of 92 per ecnt in Thyrocare for Rs 6,334 crore. This includes a 38.04 per cent stake held by Thyrocare founder Velumani and family.
Dr Velumani will also invest Rs 1,500 crore in PharmEasy (in one or more tranches) in an upcoming funding round to acquire 5 per cent in the start-up, which is estimated to be valued at over Rs 30,000 crore (over $4 billion)—a 4-fold jump in valuation for India’s largest digital healthcare firm since April this year, when it had raised $350 million in a Series E round led by Prosus Ventures and US private equity firm TPG Growth.
PharmEasy had later announced a merger with Medlife to propel growth beyond the online B2B and B2C pharmacy segment. US-based PE firm B Capital Group, Singapore headquartered Temasek Holdings Eight Road Ventures (UK), and Medlife promoters (Prashant Singh and Tushar Kumar) have major holdings in PharmEasy.
Sources say that Tiger Global will likely lead the next Series F investment round in the health tech start-up “From ordering medicines online to tele consultations and now diagnosis. services, amidst the pandemic there is a shift not only in consumer preferences but also the business approach and modus operandi by doctors, hospitals, pharmacies and clinics across the country,” Dr Velumani said.