Japan's Arkray buys Span Diagnostics' IVD unit for Rs 108 cr

Japan's Arkray group, a medical technology major, has bought the in-vitro diagnosis (IVD) business of Surat-based Span Diagnostics for Rs 108 crore.
Span Diagnostics chairman Pradeep Desai, who along with his family holds 44 per cent in the publicly traded company, told PTI that "the deal involves Rs 78 crore in cash and a little over Rs 30 crore of debt in the book of Span, which the Japanese company will take over as part of the sale."
The deal not only unlocks the potential of the Rs 2,000-crore IVD market, but also opens the gates for more deals on the Indo-Japanese corridor, according to Singhi Advisors, the investment bankers, who worked on the deal.

The Kyoto-based USD 700-million Arkray group is already present here as Arkray Healthcare India and Span will be renamed post-deal, said Desai, who will continue as managing director of the merged entity.
While the biggest Japanese deal was the buyout of Ranbaxy by Daiichi Sankyo, some of the recent deals involving Japanese companies include YKK's acquisition of Bhoruka's aluminium business last year, and Toshiba Corp's majority stake buy in the Hyderabad-headquartered Vijai Electricals for about USD 200 million.
"The board of Span, a leading manufacturer of diagnostic products and supplier of HIV test-kits to the National AIDS Control Programme, approved the transfer of its IVD business as a going concern comprising on a slump sale basis to Arkary Healthcare India. The board also approved sale of Span's ownership interest in its relevant subsidiary," the company said in a statement.

Desai expects the deal to be completed over the next four months subject to regulatory and shareholders approvals.
"This deal will advance Arkray Healthcare into the leading position in this market, one of the world's most rapidly growing markets with potential for further expansion," said Arkray Group president and chief executive Takeshi Matsuda.