Warburg Pincus to invest $85m in Indian healthcare

The global private equity firm is strengthening its presence in the Indian healthcare sector.

Global private equity firm Warburg Pincus will invest up to $85 million in Metropolis Healthcare, a chain of diagnostic laboratories in India. Financial details of the transaction were undisclosed.

The deal involves a primary and secondary acquisition of shares as well as the acquisition of additional capital, Metropolis said in a statement. It will see Mumbai-based ICICI Venture divest its entire stake in the company, which it had acquired in 2006. 

ICICI Venture invested INR350 million (€6.1 million; $7.5 million) in Metropolis Healthcare in June 2006 for an undisclosed stake. It is not clear whether the firm subsequently injected more capital into the company. ICICI Venture could not be reached by press time.

ICICI Venture declined to comment. Warburg Pincus did not respond by press time.

Established in 1981, Metropolis has a network of 45 laboratories and more than 350 collection centres across India. It processes 12 million tests a year and serves more than 10,000 laboratories, hospitals and nursing homes and about 50,000 doctors. It has expanded through a combination of organic growth and partnerships and has 10 laboratories in Sri Lanka, South Africa and the UAE. 

The additional capital will be used by Metropolis to pursue acquisition opportunities and to expand its delivery network and deepen its presence in current locations.  

“Led by a talented management team, Metropolis is well-positioned to leverage growth opportunities in the clinical diagnostics business,” Niten Malhan, a managing director at Warburg Pincus India, said in a statement.

Warburg Pincus has invested in excess of $35 billion in more than 600 companies across more than 30 countries. The firm was one of the first foreign private equity managers to make a big push into India and over the last decade, it has invested more than $2.2 billion in India. It was involved in India's landmark private equity transaction: the firm invested about $300 million in Bharti in 1999 and through a series of partial exits, it realised around $1.9 billion from the sale of its shares by 2006, giving it 6x returns.

A few of its other Indian investments include Ambuja Cements, HDFC, ICICI Bank, Kotak Mahindra Bank, Lemontree Hotels, Piramal Healthcare, Punj Lloyd, Gangavaram Port and Max India.