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Sequoia India divests 16% stake in Dr. Lal PathLabs to TA Associates

  • Anita Davis
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VC firm Sequoia Capital India has reportedly agreed to sell half of its stake in in Indian diagnostics specialist Dr. Lal PathLabs to US-based PE firm TA Associates, leaving both TA Associates and five-year investor Sequoia with 16% stakes apiece in the company.

TA Associates reportedly paid INR163 crore ($35 million) for its stake, valuing Dr. Lal PathLabs at INR1,000 crore ($213.4 million). In light of the deal, Sequoia Director Sandeep Singhal pointed out that the company saw revenue of INR40 crore ($8.6 million) in 2005 - the year Sequoia first invested in Dr. Lal PathLabs - which is expected to spike to INR250 ($53.7 million) crore by FY2011, with profit coming in at INR40 crore.

Sequoia invested in Dr. Lal PathLabs from its first fund, coming in two investment rounds in 2005 and 2007. It overall held a 33% stake in the company, which has pathology and diagnostic facilities in nearly 1,000 outlets across the country. Local media suggests that, while Sequoia divests 50% of its stake to TA Associates, Dr. Lal Pathlabs' promoters will continue to hold the remaining shares. Sequoia has indicated that more than 20 investors vied for the shares, and the firm has reportedly been in discussion with potential buyers for the past 18 months.

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