Moneylife had reported on 6th May that Piramal Healthcare may be up for sale. The company was claiming that it was planning to acquire smaller labs for growth. Now it has been sold out to Super Religare Lab

Piramal Healthcare is set to sell off its diagnostics unit to Super Religare Laboratories (SRL). In a deal valued at around Rs600 crore, SRL will acquire controlling stake in Piramal Diagnostic Services Private Limited (PDSL), which provides pathology and radiology diagnostics services.

This development is completely contrary to the Piramal management’s earlier claims about acquiring smaller diagnostics laboratories around the country in the company’s bid for growth. Moneylife had earlier written (see: http://www.moneylife.in/article/8/4344.html) on how the PDSL management’s claim of acquisitions of 10 smaller pathology labs did not ring true.

We followed this up with another article (see: http://www.moneylife.in/article/8/5230.html), which highlighted the fact that the company had already shut down its diagnostics operations in Delhi, even as it was refuting rumours of its complete exit from the diagnostics space. Dr Swati Piramal, director, Piramal Healthcare had informed Moneylife, “We would like to clarify that the news appearing in certain sections of the media about the Piramal Group planning to close its diagnostics operations is completely baseless and untrue. We have expanded rapidly till 2009 and will continue to expand after consolidating and strengthening business processes.”

Moneylife’s stance on the issue now stands vindicated with confirmation that Piramal Healthcare has entered into an agreement for SRL to acquire its diagnostics business. This is in sharp contrast to the company’s earlier claims. It appears that this was part of the management’s carefully crafted strategy to give a wrong impression.

Interestingly, while PDSL was talking of acquisitions, the business was running at large losses for the past three years. The losses it incurred over the past three years are Rs3.54 crore (2007), which increased to Rs4.20 crore and Rs3.71 crore in 2008 and 2009, respectively.

Commenting on the sell-out, Ajay Piramal, chairman, Piramal Group told PTI, “We feel it is the right time to take the business to the next level and this development will give it the scale and size to serve a much larger base of Indian customers with a high level of quality and care.”