Private equity firm Warburg Pincus India Pvt. Ltd has invested $85 million (around Rs390 crore) in Mumbai-based Metropolis Healthcare Ltd, a chain of diagnostic laboratories.
The deal provides an exit for ICICI Venture Funds Management Co. Ltd, which hadinvested Rs35 crore in Metropolis in 2006. Apart from ICICI's stake sale to Warburg Pincus, the deal also includes additional capital infusion intoMetropolis by Warburg Pincus.
The size of the stake acquired by Warburg Pincus was not disclosed.
Metropolis has 55 laboratories, of which 45 are in India and the remaining 10 in South Africa, Sri Lanka and West Asia.
“The funds are going to be used for inorganic growth,” said Ameera Patel, executive director and chief executiveof Metropolis. “We plan to start five greenfield laboratories and do four-five acquisitions.”
Warburg Pincus, which has $30 billion under management, has invested $2.2 billion in India so far.
The Indian companies it has invested in include cement maker Ambuja Cements Ltd, telecom services provider company Bharti Airtel Ltd, port operator Gangavaram Port Ltd, hotel chain Lemon Tree Hotels and Max India Ltd, which has interests in healthcare and financial services.
“Healthcare is an important focus area for Warburg Pincus,” said Dalip Pathak, a member of the executive management group at Warburg Pincus.
The investment in Metropolis, which he said is “uniquely positioned” in healthcare services, will help expand the PE firm's presence in India.
“Diagnostic services is a strong growth segment in the healthcare space. Some ofthe players have scaled up their business in the past few years, and hence, the needfor capital has increased,” said Rajesh Singhal, managing partner of Milestone Religare Investment Advisors Pvt. Ltd.
Source: American Chronicle