Dr. Lal PathLabs Limited (DLPL), an Indian diagnostic and healthcare services provider, has agreed to acquire Suburban Diagnostics (India) in an all-cash deal for an enterprise value of 18.5x of FY22 audited EBITDA subject to a floor of INR 925 crores and a cap of INR 1,150 crores.

Suburban Diagnostics has been providing diagnostic services since 1994.

Its acquisition gives the Delhi-based Dr. Lal PathLabs access to 44 laboratories and diagnostics centers and more than 150 collection centers.

Suburban Diagnostics’ 8000sft central processing lab in Mumbai has been accredited by NABL since 2003 and CAP since 2014. The diagnostic services provider has five more labs located in Thane, Borivali, Goa, Pune, and a recently developed molecular diagnostics lab at Andheri.

Its FY21 revenues are INR 294 crores.

Dr. Sanjay Arora — Founder of Suburban Diagnostics (India) said: “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 this 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.

“As a medical professional, I will be able to concentrate on adding value to medical outcomes. This association with DLPL allows us to play to our strengths while continuing to add value to society.”

Dr Sanjay Arora will join Dr. Lal PathLabs as group medical director.

Dr. Lal PathLabs said that western India region is a strategic priority and Suburban Diagnostics serves as a platform acquisition.

It further stated that the acquisition gives a platform to tap Suburban Diagnostics’ robust consumer and medical brand recognition, vast network, and professional management team to further expedite its growth trajectory.

The acquisition is anticipated to close within one month.

Dr. Om Manchanda — Managing Director of Dr Lal PathLabs said: “Suburban Diagnostics transaction is in line with our stated strategy of driving growth through inorganic route especially in West and South regions. This transaction has a strategic significance for us from a long term stand point.”

  Dr. Lal PathLabs, Dr. Om Manchanda, Dr. Sanjay Arora, India, Mumbai, Suburban Diagnostics (India)