Fortis Healthcare to buy the entire 31.52% stake of Agilus Diagnostics

A multinational diagnostics company based in India, Agilus Diagnostics Limited provides radiology and pathology diagnostic services. The company, with its headquarters located in Gurgaon, possesses the largest network of labs that have been accredited by NABL as of March 31, 2023, according to the CRISIL Report. As of March 31, 2023, Agilus Diagnostics’ extensive network in India covered over 532 districts, over 1,000 towns and cities, and 25 states and five union territories. The company served 16.62 million patients in Fiscal 2023 and performed an average of 107,043 diagnostic tests per day in that same fiscal year, with 413 laboratories as of March 31, 2023. Furthermore, as of March 31, 2023, the Diagnostics Laboratory Network employed 4,614 technicians and paramedical staff in addition to 438 physicians (pathologists, scientists, and radiologists) for medical and scientific purposes. An IHH Healthcare Berhad Company, Fortis Healthcare Limited is one of India’s top providers of integrated healthcare services. It is among the biggest healthcare organizations in the nation, with more than 400 diagnostic centers (including joint ventures), over 4,500 operational beds (including O&M facilities), and 28 healthcare facilities. Fortis has operations in Nepal, Sri Lanka, the United Arab Emirates (UAE), and India. Approximately 23,000 workers at Fortis, including Agilus Diagnostics Limited, are committed to achieving the company’s goal of being the most reliable healthcare network in the world.

Fortis Healthcare is going to hold an 89.21% stake in Agilus Diagnostics:

On Friday, Fortis Healthcare Ltd. declared that it will use non-convertible debentures (NCD) to raise money in order to buy out the PE investors for an extra 31.52% of Agilus Diagnostics Ltd. Fortis Healthcare, at present, the private hospital chain, holds a 57.69% stake in Agilus Diagnostics, the company said through an exchange filing. As of right now, International Finance Corp. owns 7.61% of the company, while NYLIM Jacob Ballas India Fund III LLC and Resurgence PE Investments Ltd. own 15.86% and 8.05% of the company, respectively. These three entities are usually referred to as PE investors. 

According to the shareholder agreement signed on June 12, 2012, PE investors have certain exit rights that include exit through exercise of a put option requiring Fortis Healthcare to acquire the stakes at a fair market value. 

The board authorized fundraising on Friday by authorizing the issuance of senior, secured, rated, and listed NCDs to qualified investors, including foreign portfolio investors in one or more tranches. The company also revealed in its regulatory filing that it is sending a postal ballot notice to its members to solicit their approval for various proposals, one of which is the acquisition of Adilus Diagnostics.

Fortis Healthcare Ltd. stock is 1% up in intraday:

At present, the share price of Fortis Healthcare Ltd is Rs. 557, indicating a nearly 1% increase, with the highest stock trade of the day being Rs. 565. The stock has increased by 66.25% over the last 12 months and by 25.52% so far this year.

Conclusion: Fortis Healthcare is set to increase its stake in Agilus Diagnostics to 89.21% by raising funds through NCD. Currently, their stake in Agilus Diagnostics stands at 57.69%. This move is expected to significantly boost Fortis Healthcare’s presence in the healthcare industry.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.