Metropolis Healthcare slips as acquisition deal set to collapse
Metropolis, since the 3rd/4th week of April 2021, has been trying to conclude the said transaction with the sellers under the SPA
Metropolis Healthcare fell 4% to Rs 2,872 after the company said its acquisition deal which it had announced earlier this year is headed for a collapse.
The board of directors of Metropolis Healthcare had approved the acquisition of Dr. Ganesan’s Hitech Diagnostic Centre and its subsidiary Centralab Healthcare Services on 17 January 2021 in a combination of cash and equity shares deal.
To achieve the closure of the transaction the company took shareholder and other necessary approvals. However, through delays in the completion of the sellers’ obligations under the Share Purchase Agreement (“SPA”), the transaction as contemplated under the SPA was initiated but has not been wholly consummated till date.
In the interim, the statutory approvals obtained by the company under SEBI ICDR have lapsed in accordance with applicable law and are required to be re-obtained.
Metropolis, since the 3rd/4th week of April 2021, has been trying to conclude the said transaction with the sellers under the SPA. A letter was also issued on 5 July 2021 to the sellers asking them to fulfil their obligations under the SPA and communicate to the company on the said transaction, failing which it will be considered as a confirmation by the sellers of their intention to terminate the transaction without prejudicing the rights of the company under the SPA.
In the view of no communication from the sellers to the letter issued on 5 July 2021, it can be assumed that the sellers are not intending to close the transaction. The company is presently evaluating its rights, and the various routes available for their enforcement, and will accordingly take appropriate actions on this matter.
Metropolis said it will continue its growth path by exploring various opportunities in the marketplace.
Metropolis Healthcare’s consolidated net profit surged to Rs 61.30 crore in Q4 FY21 from Rs 15.50 crore in Q4 FY20. Revenue from operations increased by 42% year-on-year (Y-o-Y) to Rs 291.80 crore during the quarter.
Metropolis Healthcare is a leading diagnostics company in India with a widespread presence across 19 states in India.
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