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Mumbai Feb. 21 Diagnostics-company Metropolis Health Services seems to have an appetite for more acquisitions in the domestic and international markets, looking at about five potential targets this year.

Despite having locally acquired Gribbles Pathnet, a joint-venture between Dr Reddy's and the Australian healthcare company Gribbles, about 18 months ago - Metropolis is still on an aggressive path for growth to consolidate its position in the industry, Metropolis' Executive Director Ms Ameera Shah told Business Line. The Mumbai-headquartered-chain is looking for about four or five acquisitions in the local or overseas markets, she said, and is exploring ways to finance these deals. The markets that the company is exploring include the UK, the US and South East Asia, she added.

The plan is being driven by the company's need to "run away from the pack", she said. Citing a McKinsey report, she said, the diagnostic services industry is an estimated Rs 10,000-crore industry, with a lion's share being in the un-organised sector. Other organised players in the segment include Nicholas Piramal's Wellspring Labs, Ranbaxy promoter-family-run SRL and Dr Lal's Pathlab Network.

Metropolis expects to clock revenues of Rs 100 for the year ended March 2007 and projects between Rs 175 to Rs 200 crore in the coming year. The company is in the process of charting its international plans, having established diagnostic labs in West Asia, South Asia and now South Africa. They would help bring in the additional revenues.

Metropolis has recently tied-up with a South-African industrial house dealing in property-development, banking and insurance, to set up two labs in Johannesburg and Cape Town, she said. Though the name of the company was not divulged, Metropolis expects the new venture to generate revenues of about Rs 15-20 crore in its first year of operation. Work that gets outsourced to other labs in South Africa can be directed to Metropolis and its back-end support in India, she said, indicating how revenues would flow from the venture. Metropolis has invested Rs 10 crore in the new venture. Part of the funding has come from the Rs 35-crore funding it got from ICICI Ventures. The first lab in South Africa is set to get operational in June.

More Stories on : Mergers & Acquisitions | Medical Institutions & Hospitals

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