Dr Lal PathLabs acquires Suburban Diagnostics in an all-cash deal

Dr Lal PathLabs Limited (LPL) announced on Tuesday that it will acquire 100 per cent equity of Suburban Diagnostics (India) Private Limited in an all-cash deal for an enterprise value of Rs 925 crore and a cap of Rs 1,150 crore. The diagnostic giant said in a regulatory filing that the existing cash reserves will fund the deal.

Suburban Diagnostics founder Dr Sanjay Arora will join Dr Lal Pathlabs as Group Medical Director. The acquisition is expected to close in a month.

LPL said that Suburban Diagnostics is a platform acquisition and that the Western India region is a strategic priority for LPL. It said that it will leverage Suburban’s strong consumer and medical brand recognition, wide network and professional management team to accelerate its growth trajectory.

Additionally, through this deal LPL will have access to over 150 collection centres, 44 laboratories and diagnostics centres of Suburban, out of which one is CAP-accredited and five are NABL-accredited.

“Our joining hands with Suburban Diagnostics is a significant step in LPL’s endeavor to expand our footprint in Western India. I am confident that our combined strengths and a similar DNA of both the companies- led by doctor promoters, will lead to new heights in serving our customers across Western India,” said Executive Chairman Dr Arvind Lal.

Ernst & Young acted as financial advisors to LPL, while Avendus Capital & Candle Partners acted as financial advisors to Suburban.

Dr Lal Pathlabs currently has 231 clinical laboratories, 3,705 patient service centers (PSCs) and 9,247 pick-up points (PUPs).

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