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Reliance’s yet-to-be introduced acquisition of Netmeds for an estimated $120 million is a catalyst for different gamers similar to PharmEasy and Medlife to discover merger and acquisition negotiations, a number of sources advised ET.
The Mumbai-based PharmEasy – backed by Temasek, CDPQ and Orios Venture Partners – might purchase its Bengaluru-based rival in a primarily inventory deal valued at $120-150 million, the sources stated.
Multiple international monetary traders, together with US non-public fairness agency TPG which has a powerful healthcare centered portfolio, might additionally spend money on the mixed entity if the merger goes by.
“Like what took place in the horizontal ecommerce space, where Flipkart and Amazon came out as winners while others fell by the wayside, the same will take place in the online pharma space. Reliance’s entry will give a difficult time to the other players,” an funding banker advised ET on situation of anonymity.
The sources declined to talk on file, as they’re both a part of the continuing negotiations or have been briefed on the developments.
“PharmEasy has always been strong in the western part of India, while Medlife has had a good presence in the South. So, consolidation makes sense, because you need deep pockets to compete with Reliance,” a second supply stated.
Temasek’s funding in PharmEasy, which ET first reported in August final yr, values the corporate at $600-700 million, giving it a considerable conflict chest to finance its buyouts. “It would be good if a few players fold and merge into each other or with larger players…,” stated the CEO of an e-pharmacy agency on situation of anonymity.
Medlife and TPG declined to remark, whereas PharmEasy didn’t reply to emails until the time of going to press. Additionally, 1mg can be believed to have held exploratory talks with PharmEasy for a possible acquisition. The firm, in accordance with the sources cited earlier, can be seeking to elevate contemporary funding. Prashant Tandon, CEO of 1mg, didn’t reply to ET’s e mail in search of remark. The firm, together with outstanding startups like Curefit, Practo and Policybazaar, can be reportedly enjoying a crucial position in stitching collectively a telemedicine alliance that’s a part of the Bharat Health Stack, a expertise stack being created to digitise affected person information and information for hospitals and physician consultations.
The Swasth Alliance, in flip, is being seen because the third faction that would dominate India’s on-line pharma and drug supply area, alongside the Reliance-Netmeds and PharmEasy-Medlife combines, sources indicated.