Reliance Retail Acquires Majority Stake in Netmeds’ Parent

Reliance Industries said that its subsidiary Reliance Retail Ventures has acquired a majority equity stake in Netmeds’ parent Vitalic for approximately ₹620 crore giving the Mukesh Ambani-led group a 60% stake in the Chennai-based company. In a late evening filing, RIL said that it will also get a 100% direct equity ownership of Netmeds’ subsidiaries, Tresara Health, Netmeds Market Place and Dadha Pharma Distribution.

Meanwhile, online medical store PharmEasy has agreed to merge with smaller rival Medlife, filings with India’s antitrust body show. The move heralds the first big consolidation play in a sector that has seen heightened competition and entry of deep pocketed players like Reliance Industries and Amazon.

Medlife will sell 100% shares to API Holdings, the parent entity of PharmEasy, in return for 19.59% ownership in the combined entity, according to the filing with the Competition Commission of India.  Both firms have formally requested CCI to approve the proposed merger.

Sources in the know of the deal details pegged the valuation of the combined entity at $1.2 billion, which values the stake of Medlife shareholders at around $235 million. PharmEasy was valued at around $700 million when it closed a $220 million funding round led by Singapore’s Temasek in November. It is as yet unclear if the transaction is a purely stock-swap deal. 

Mumbai-based PharmEasy — backed by Temasek, CDPQ and Orios Venture Partners — is looking to line up financial investors, including US private equity firm TPG — which has a strong healthcare focused portfolio, to invest in the combined entity.

“The proposed combination relates to the acquisition of 100% equity shares of Medlife by API Holdings, and as consideration, the acquisition of up to 19.59% of the equity share capital of API Holdings (on a fully diluted basis), by the Medlife Promoter Shareholders and other shareholders of Medlife,” the filing read.

Medlife was founded by Tushar Kumar, son of Alkem Laboratories owners Prabhat Narain Singh and Prashant Singh, Ananth Narayanan, who was appointed Medlife CEO in August last year, will stay on as an advisor for some time even after the deal is closed, sources added.

No comments: