Metropolis Healthcare indicates scrapping of Hitech Diagnostic Centre deal

Metropolis Healthcare indicated that its previously announced acquisition of Dr. Ganesan’s Hitech Diagnostic Centre and its subsidiary Centralab Healthcare Services is likely to be terminated.

The Indian chain of pathology labs and diagnostic centers said that the closing of the cash and stock deal has been delayed by the sellers in fulfilling their obligations under the share purchase agreement (SPA).

Hitech Diagnostic Centre is a diagnostics lab chain with operations across South India. Founded in 1986, Hitech Diagnostic Centre has 31 laboratories, which include three NABL and ICMR accredited laboratories as well as 68 collection centres.

It was offered INR 511 crore in cash and up to 4,95,000 equity shares priced at INR 2 per share in Metropolis Healthcare.

According to Metropolis Healthcare, the deal to acquire the diagnostics lab chain was approved by its board in January 2021. The company said that it had received statutory approvals obtained by the Company under SEBI ICDR but they have expired in accordance with applicable law and are needed to be re-obtained.

Metropolis Healthcare indicates scrapping of Hitech Diagnostic Centre deal

Metropolis Healthcare stated: “The Company, since the 3rd/4th week of April 2021, through various discussions and correspondences has been trying to conclude the said transaction with the Sellers under the SPA.

“A letter was also issued on 5th July 2021 to the Sellers asking them to fulfil their obligations under the SPA and communicate to the Company on the said transaction, failing which it will be considered as a confirmation by the Sellers of their intention to terminate the transaction without prejudicing the rights of the Company under the SPA.”

Metropolis Healthcare said that it can be assumed that the sellers are not intending to complete the deal as they did not respond to its letter, which was issued earlier this month.

Currently, the pathology labs and diagnostic centers chain said that it is assessing its rights, and the multiple routes available for their enforcement, and will accordingly take suitable steps on the matter.

The Mumbai-based Metropolis Healthcare stated that it will also look into various opportunities in the marketplace for its continued growth.