Four years after he exited pathology laboratory chain Metropolis Healthcare by selling 37 per cent stake to Private Equity firm Carlyle Group, serial entrepreneur G S K Velu is looking at expanding his diagnostics business. The move follows the expiry of the restrictive clauses that were put at the time he sold his stake to the private equity firm.
Velu's diagnostics firm Neuberg Diagnostics has today announced the merger of Healyst Laboratory, a Chennai-based technology diagnostics service provider founded by P Srinivasan, ex-founder of Lister Laboratories, which was spearheaded by him and Saranya Narayan, to expand its presence in Tamil Nadu and Puducherry.
"I had two years of non-compete clause and another two years of non-disrupt, which got over yesterday. One of the clauses was that ex-joint venture partners cannot join in. Now there is no restriction," he said while announcing the merger of Healyst Laboratory with Neuberg Ehrlich Laboratory (NEL) Pvt Ltd. It may be recalled that Lister Labs was acquired by Metropolis Healthcare and the clause on working with ex-joint venture partners had been a restriction earlier.
"We aim to become the most reputed diagonstics firm in the country in next two or three years," said Velu, chairman, Neuberg Diagnostics, A Global Pathology brand, operating in India, UAE, Sri Lanka, South Africa. "We will be offering the best-in-class and the latest technology diagnostics services, by moving from evidence-based medicine to personalised medicine, using genomics, digital pathology, molecular diagnostics and others and the business growth will follow."
Velu revealed neither the quantum of investments needed for the expansion plans, nor the financial details of the NEL-Healyst Laboratory merger.
He said that Neuberg Diagnostics, which clocked a turnover of Rs 450 crore last year, is expected to grow to Rs 600 crore this year and the plans are to cross Rs 1,000 crore two years from now. The focus in domestic market would be to grow in the western and eastern regions of the country. With the restrictions lifted, the company can now start business in Maharashtra strongly, he said.
In India, the company has around 50 labs and 400 collection centres, and plans are to take that up to 150 labs and close to 2,000 collection centres in the next two years. While Neuberg Diagnostics is fully owned by Velu, it has regional subsidiaries that have collaborated with local partners, with the brand name of such partners attached to Neuberg.
The company has already become the fourth-largest chain in South Africa and is expanding in the eastern and western parts of the continent. About Rs 180 crore out of the Rs 450 crore turnover last year was from international business. In South Africa, the company has a private equity investor, Investment Funds for Health in Africa (IFHA), which is helping it grow. He said the company is not looking at raising private equity investment in Neuberg Diagnostics, the holding company.
According to earlier reports, Sushil Shah, the promoter of Metropolis, had around 36 per cent while Velu had a 37 per cent stake in Metropolis Healthcare. The Shah family picked up 27 per cent equity stake from Private Equity firm Warburg Pincus for Rs 550 crore, which sparked a power battle between Velu and the family. Velu sold his stake to Carlyle Group for an undisclosed amount in 2015. He re-entered the diagnostics business with Neuberg Diagnostics two years later, reports said.