Fortis to acquire 86% stake in Super Religare Laboratories

Fortis Healthcare's board gave an inprinciple approval for setting up standalone dialysis centres and to foray into diagnostic centres starting with the acquisition of a majority stake in SRL, the company said on Thursday. The Singh brothers together own 81.5% stake in Fortis, India's second-largest hospital chain.

The transaction will lead to transfer of ownership of SRL to another company, also majority owned by the same promoters. Shivinder Mohan Singh, MD of Fortis Healthcare India, said the addition of diagnostics and retail dialysis businesses will serve to enhance the quality of care to the company's customers.

“This will better enable Fortis to deliver comprehensive and quality healthcare, with end-to-end service, thus taking us a step closer to our goal of reliable, affordable and accessible medical services for all.” A Fortis spokeswoman said the valuation of the stake has not been decided and the company will buy promoters stake' in SRL at a price calculated by an independent valuer. The deal will be funded by cash on Fortis' books, she said. Fortis has cash reserves from funds raised over the last two years for expansion.

The spokeswoman said the deal was approved only by independent directors on the board of Fortis. Ranjit Kapadia of brokerage firm HDFC Securities said there should not be any corporate governance issue if the valuation is done by an independent third party. SRL has a network of eight reference laboratories, 164 pathology, 17 radiology and 888 collection centres.

Last August, SRL acquired Piramal Diagnostic Services to emerge as the country's number one pathology chain, ahead of competitors such as Dr Lal Pathlabs and Metropolis Healthcare. Fortis Healthcare (India) shares last traded at Rs 161.75, up 2.02% on the Bombay Stock Exchange on Wednesday. The Mumbai market was closed for trading on Thursday.