26 June 2021: When it rains it pours. This is exactly what happened when the dynamic 32-year-old Siddharth Shah, Co-founder & CEO of API Holdings, met with 62-year-old, diagnostic services veteran Dr. A Velumani, Chairman of Thyrocare in monsoon drenched Lonavala over masala chai at the Thyrocare Chairman’s residence and a landmark deal was struck in record time. 

API Holdings Ltd (API), the parent co. of India’s Largest Digital Healthcare Brand, (PharmEasy), founded by Dharmil Sheth, Dhaval Shah, Harsh Parekh, Hardik Dedhia and Siddharth Shah, today announced the signing of definitive documents to acquire 66.1% stake in Thyrocare Technologies Ltd (Thyrocare) from Dr. A Velumani and affiliates at a price of INR 1,300 per share aggregating to INR 4,546 crs. 

The transaction is subject to regulatory and other applicable customary approvals. Docon Technologies Pvt Ltd, a 100% subsidiary of API, will be the acquirer and shall make an open offer for an additional 26% stake. 

Dr. A Velumani will be separately acquiring 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.

PharmEasy is India’s #1 online pharmacy and diagnostics brand, RetailIO – India's largest B2B pharma marketplace & seller, and DocOn – a leading consultation and EMR platform. The company has a loyal base of 12mn+ consumers, network of 6,000+ digital consultation clinics and 90,000+ partner retailers across the country. It currently serves over 1mn patients for their pharmacy & diagnostics needs, conducts 300k+ consultations, and issues over 1mn digital prescriptions on a monthly basis.

Thyrocare is India’s #1 diagnostics solution provider by volume with over 110mn tests performed annually. It is the largest B2B player in the diagnostics space and has a network of 3,330+ collection centres across in 2,000+ towns in India. Thyrocare operates a multi-lab model with 1 mega central processing lab, 2 zonal processing labs and 13 regional processing labs across the country. Thyrocare operates with industry leading gross margins and its lean cost structures makes it one of the most efficiently run operations in the diagnostics space. 

The collaboration between PharmEasy and Thyrocare is unique and transformative for the Indian healthcare sector, consumers and the entire healthcare ecosystem. The synergies of both, India’s largest digital health platform and one of the largest, cost-effective diagnostics solution providers (by volume) will reimagine and accelerate the delivery of high-quality diagnostic and OPD services across the full continuum of patient care to nearly 800mn Indians. 

PharmEasy’s strong belief and commitment is to provide an integrated digital health platform which enables in democratizing quality healthcare to all Indians, and the company will leverage its deep technology expertise across every single part of the OPD value chain to achieve availability, affordability and accessibility for consumers.

On the addition of Thyrocare into its portfolio, Mr Siddharth Shah, CEO, API Holdings commented “We are delighted to be partnering Thyrocare. 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 hours.”

Dr A. Velumani, Chairman & MD of Thyrocare, expressed “I am excited about this relationship, unique of its kind in Indian Healthcare Industry. The unique reach and strength of Thyrocare in Diagnostics blended with young and dynamic team of PharmEasy will bring in better healthcare solutions for common man nationwide.”

India, with one of the fastest growing digital economies and digitally nascent healthcare sector, is on an exponential growth trajectory addressing the demand to improve quality, accessibility and convenience. From ordering medicines online to tele consultations and now diagnostic 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. 

About API Holdings: API Holdings is India’s largest and fully integrated digital healthcare company. Over the last few years, API has grown rapidly to build its presence across the entire OPD value chain serving consumers and pharmacy retailers for their needs for pharmaceutical & OTC products, doctor consultation and diagnostics services. It operates leading brands like PharmEasy, RetailIO, DocOn and has a robust presence across the length and breadth of the country.  

About Thyrocare: Thyrocare is India's first fully automated accredited diagnostic laboratory with a focus on providing quality at affordable costs to laboratories and hospitals in India and other countries. It operates with a Centralized Processing Laboratory (CPL) in Mumbai - India for esoteric tests; and Regional Processing Laboratory in major metro cities of India and other parts of Asia.

API Holding’s advisory was led by JM Financial as the M&A Advisor and Manager to the Open Offer, and Kotak Investment Banking as the M&A Advisor and Advisor to the Open Offer. Iqbal Khan (Senior Partner) and Ambarish (Partner) from Shardul Amarchand Mangaldas & Co. and Ashwath Rau (Senior Partner), Anand Shah (Senior Partner) and Pranav Atit (Partner) from AZB & Partners are acting as the counsels on M&A and Open Offer. Nisha Kaur Uberoi (Senior Partner) from Trilegal is acting as the Lead Counsel on Competition Law to API Holdings. In addition, BCG provided Strategy & Management Consulting advice, EY was the Financial & Tax Due Diligence advisor and Katalyst Advisors was special advisor on the deal.

*This story is published by VOH team*

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