Fortis Healthcare, backed by IHH Healthcare, is set to buy out the private equity firms that hold a stake in its diagnostics arm, Agilus Diagnostics (formerly known as SRL). This move comes after years of lengthy negotiations, according to sources.
Private equity firms Jacob Ballas and International Finance Corporation (IFC), along with Resurgence PE, currently own around 34% of Agilus. They are selling their shares and using a put option to exit.
The deal values Agilus at about ₹5,000 crore, according to insiders.
Fortis Healthcare announced in a stock exchange filing that Jacob Ballas had decided to exercise its put option. Specifically, NYLIM Jacob Ballas India Fund III, LLC, one of the investors, plans to sell 1.24 crore (12.4 million) equity shares, representing a 15.86% stake in Agilus, for ₹905 crore.
Other investors are expected to follow suit by next week, which will increase Fortis Healthcare’s ownership in Agilus from about 57% to roughly 91%. The remaining shares are held by individual investors.
Agilus operates 413 laboratories across 25 states and five union territories, with major labs in Gurugram, Bengaluru, Chennai, Kolkata, and Cochin. For the financial year ending March 31, 2024, Agilus reported revenue of ₹1,391 crore.
Despite its expansion efforts, including acquiring Kerala-based DDRC in 2021-22, Agilus has struggled to grow as much as it wanted due to a lack of additional investment from private equity backers. The company also shelved plans for an initial public offering (IPO).
Crisil, a ratings agency, noted last year that Agilus faces increasing competition from online health companies, particularly in the wellness sector. However, Crisil expects Agilus’s profit margins to stay stable due to its strong presence in the business-to-business (B2B) market and its focus on complex testing services.
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