Avendus Capital Advises Suburban Diagnostics on Its Acquisition by Dr. Lal Pathlabs

Suburban Diagnostics (Suburban), one of West India’s leading diagnostics companies, announced that it has signed a definitive agreement to be acquired by Dr. Lal PathLabs (DLPL). DLPL will acquire 100% of Suburban in an all-cash deal for an enterprise value of INR 925-1,150 crores, based on an 18.5x multiple of FY22 audited EBITDA. The transaction also provides an exit for Sequoia Capital India, who have partnered with the Company since the first investment in 2012. The deal is expected to be closed within the next month.

Avendus Capital acted as financial advisor to Suburban Diagnostics on the transaction.

Deal Value

INR 925 – INR 1,150 cr

Service

Mergers & Acquisitions

Sector

Healthcare

Date

October 2021

One of my missions has been to unburden healthcare and add value to medical outcomes. By coming together with DLPL, I will get the right platform to make an impact at a national level. The core of any healthcare organization is to add medical value, while continuing to drive good governance and positive commercial success. This association with DLPL allows us to play to our strengths, while continuing to add value to society.

Dr. Sanjay Arora

Founder & Managing Director, Surburban Diagnostics

This strategic acquisition brings together two organizations anchored in similar values. Under the DLPL umbrella, brand Suburban is well-positioned to scale further. We expect the industry consolidation and shift in preference towards organized diagnostics players to continue, benefitting the end consumers and improving healthcare outcomes in the country.

Chintan Kothari

Head, Healthcare Investment Banking at Avendus Capital

About Suburban Diagnostics

Founded in 1994 by Dr. Sanjay Arora, Suburban is a leader in Mumbai, Maharashtra and West India with ~200 centres across 10+ cities. Suburban’s culture of clinical excellence and patient centricity has established it as the most trusted brand by the medical community, consumers and the healthcare ecosystem.

With this acquisition, DLPL, India’s premier diagnostics company, will expand its leadership position, taking its West India business contribution to 24% (from 10%). Greater Mumbai will also become the second largest cluster for DLPL after Delhi-NCR.