PharmEasy Acquires 66.1% Stake In Listed Diagnostics Chain Thyrocare For INR 4,546 Cr

API Holdings Ltd (API), the parent company of online pharmacy startup PharmEasy, on Friday (June 25) announced that it has acquired a 66.1% in diagnostics chain Thyrocare for INR 4,546 Cr.

While PharmEasy raised $350 Mn at a valuation of $1.5 Bn in April this year to become a unicorn, Thyrocare is a publicly listed company with a market capitalisation of INR 7,660 Cr. Its shares were trading at INR 1,450.35 at the day’s close. The company’s share price has risen 187% over the past one year —  a period when the country has been reeling under the Covid-19 pandemic.

The deal is subject to regulatory approval and has been finalised at a discounted price of INR 1,300 per share.

Moreover, Docon Technologies, a subsidiary of API Holdings, will make an open offer for an additional 26% stake. Pharmeasy said that Thyrocare chairman and managing director Dr A Velumani will separately acquire a minority non-controlling stake of less than 5% in API as part of a series of equity investments by existing and new investors of API.

The healthtech unicorn has a customer base of 12 Mn+, a network of 6,000+ digital consultation clinics and 90,000+ partner retailers across the country. It currently delivers services to over 1 Mn patients for their pharmacy & diagnostics needs, conducts 300K+ consultations, and issues over 1 Mn digital prescriptions on a monthly basis.

Thyrocare claims to be the country’s largest diagnostics provider by volume — with over 110 Mn tests performed annually. It has a network of 3,330+ collection centres across more than 2,000 towns in India. The company operates a multi-lab model with 1 mega central processing lab, 2 zonal processing labs and 13 regional processing labs across the country. 

It’s Raining Deals In Healthtech

The country’s healthtech sector has seen a string of mega-deals in the last one year. On June 10, Tata Digital, the digital services subsidiary of Tata Sons, announced a majority stake acquisition in Delhi NCR-based epharmacy and telemedicine startup 1MG. The deal size was estimated to be at $270 Mn, according to a Business Standard report.

Last year, Reliance Retail had acquired a 60% equity stake in epharmacy startup Netmeds for $83 Mn (INR 620 Cr). The Mukesh Ambani-led company got 100% equity ownership of Netmeds subsidiaries. Amazon, on the other hand, had launched Amazon Pharmacy vertical to offer medicine delivery services pan India.

Over the multiple lockdowns in India, epharmacies have emerged as an essential service leading to the majority of Indians depending on platforms such as 1MG, mfine, Pharmeasy, Practo and others for doctor consultations and medicine deliveries.The clarity around epharmacy and telemedicine regulations brought a massive shift in terms of the consumer mindset. “Patients have started to realise a lot of value in healthtech. Patients now realise that they don’t have to expose themselves to undue risk if healthcare can come directly to them,” 1MG cofounder Tandon told us last year.

According to an Inc42 Plus report titled India’s Healthtech Landscape In A Post-Covid-19 World, the Indian healthtech market is projected to reach a market size of $21.3 Bn by 2025, from $5.2 Bn in 2019. The market is expected to grow at a CAGR (compound annual growth rate) of 27% between 2020-25 and will acquire 3.2% of the global healthtech market pie by the end of the period. 

In 2020, the healthtech segment saw a decline of 11% in the overall funding, even though the deal count increased by 24% in comparison to 2019. The healthtech sector recorded 77 deals raising $455 Mn in funding in contrast to $512 Mn funding in 62 deals in 2019, according to Inc42 Plus’ Annual Indian Tech Startup Report 2020.