Metropolis Healthcare to Acquire Scientific Pathology

Metropolis is focusing on expanding its footprint across North India, particularly in cities and towns where it currently lacks a strong consumer brand.

Metropolis Healthcare, India's second-largest pathology laboratory chain, is set to acquire Scientific Pathology, based in Agra, in an all-cash deal valued between INR 55 Cr and INR 83 Cr.

The final valuation will be determined based on revenue and EBITDA milestones.

This strategic acquisition aims to bolster Metropolis's presence in western Uttar Pradesh, where Scientific Pathology has established itself as a dominant player.

Reportedly, the transaction will be executed through Metropolis' wholly owned subsidiary, Metropolis Clinical Pathology Private Limited, which will acquire and operate Scientific Pathology's laboratories and collection centers in Agra and neighboring towns.

Under the agreement, the acquisition will follow a slump sale transaction, with consideration set at 12.2 times the adjusted EBITDA over a predefined assessment period.

The deal will be carried out through a Securities Subscription Cum Shareholders' Agreement (SHA) backed by Metropolis Healthcare Limited.

Following the acquisition, Metropolis Clinical Pathology will transition from a wholly owned subsidiary while remaining an integral part of the Metropolis Healthcare Group.

Expanding Market Share in North India

This marks Metropolis' second major acquisition in 2024, following its recent INR 246.8 crore purchase of Core Diagnostics, a Delhi NCR-based specialized cancer diagnostics provider.

With both acquisitions, the northern region's contribution to Metropolis' revenue will increase to 13% in FY26, up from the current 8%.

Ameera Shah, Promoter and Executive Chairperson of Metropolis Healthcare emphasized that the acquisition aligns with the company's strategy of expanding its direct-to-consumer (D2C) market share.

"Scientific Pathology has built a strong D2C presence, with nearly 90% of its business being D2C. In Agra, it is the market leader," Shah stated. "Dr. Ashok Kumar Sharma, who founded Scientific Pathology in 1984, was looking for a strategic partner to continue his vision while maintaining the DNA of his pathology business."

Dr Sharma will continue to work as part of Metropolis' leadership team, overseeing operations in Agra and western Uttar Pradesh.

Scientific Pathology's Market Position

Scientific Pathology currently operates three laboratories and eleven collection centers, including two NABL-accredited labs. The company recorded a turnover of INR 26 Cr in FY24, reflecting its strong regional presence.

Shah highlighted that Metropolis has successfully executed over 20 strategic acquisitions, integrating leading B2C labs across key cities and transforming them into regional hubs for expansion.

"This strategy has allowed us to build trusted consumer healthcare brands across multiple micro-markets in India. The strong B2C focus and 40-year legacy of Scientific Pathology align well with our vision to lead in these markets," she added.

A "String of Pearls" Strategy in North India

Metropolis is focusing on expanding its footprint across North India, particularly in cities and towns where it currently lacks a strong consumer brand.

Shah described the company's approach as creating a "string of pearls," wherein it either acquires existing businesses or builds new facilities to strengthen its presence.

"We already have strong referral labs in Delhi that provide specialized and super-specialized testing support to all our labs across the northern region. We are optimistic about how our presence in the north will evolve over the next few years," she added.

According to Surendran Chemmenkotil, CEO of Metropolis Healthcare, Uttar Pradesh is among North India's fastest-growing diagnostic markets, with an estimated market size of INR 2,000 Cr.

Currently, Metropolis operates eight laboratories and 80 collection centers in Uttar Pradesh, a number that is expected to grow following the Scientific Pathology acquisition.

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