WestBridge, TA commit $44m to India’s Dr Lal Pathlabs

Both firms have previously invested in the Dr Lal Pathlabs and will hold a significant minority stake in the company. WestBridge has contributed the bulk of the investment, putting in $35 million.

In this latest transaction WestBridge and TA have acquired the remaining stake held by WestBridge Ventures I, a 2000 vintage vehicle that made two investments in Dr Lal PathLabs in 2005 and 2007 for an undisclosed stake. When TA first invested in 2010, it bought nearly 16% of the original WestBridge stake for $35 million.

“Dr Lal PathLabs is a fast-growing business. It’s the leading pathology and diagnostic chain in the country and serves millions of customers,” Sandeep Singhal, co-founder and managing director of WestBridge, told Live Mint.

This deal represents the largest investment from WestBridge Crossover Fund and its first in an unlisted company. The $500 million vehicle, which closed in 2011, was raised when the WestBridge founders relaunched their independent operation after five years under the Sequoia banner.

Dr Lal PathLabs has been valued at INR15-17.5 billion, compared with its valuation of INR1 billion when WestBridge first invested in it in 2005 through WestBridge Ventures I.

“We have 125 labs already and will add 35-40 more in 2014 fiscal year,” said Om Manchanda, chief executive of Dr Lal PathLabs, adding that the company will explore acquisition opportunities in Bangalore, Chennai, Hyderabad and Kolkata. “We are looking at city-based labs in places where we are thin,” he said. The company has a projected CAGR of 35% and expects to end fiscal 2013 with a turnover of INR45 billion.

As well as Dr Lal PathLabs, WestBridge has also previously backed Vasan Healthcare. “The business prospects of the healthcare industry in a medical care-starved country like ours are very high,” said Singhal. “We continue to look for opportunities that are financially attractive and have a high impact.”

According to AVCJ Research, last year around $1.2 billion was invested in India's medical sector across 43 deals.

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• Topics
• Secondaries
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• South Asia
• healthcare
• WestBridge Capital Partners
• India
• TA Associates
• Secondaries