With RIL Gearing Up To Acquire Netmeds, Stage Set For Consolidation In Online Pharmacy Space In India
India’s online pharmacy space is expected to see a wave of consolidation, triggered by Reliance Industries’ reported acquisition of Chennai-based Netmeds, with global investors also lining up to back the winners in the fast-growing sector.
Reliance’s yet-to-be announced acquisition of Netmeds for an estimated $120 million is a catalyst for other players such as PharmEasy and Medlife to explore merger and acquisition negotiations, multiple sources told ET.
The Mumbai-based PharmEasy – backed by Temasek, CDPQ and Orios Venture Partners –could acquire its Bengaluru-based rival in a primarily stock deal valued at $120-$150 million, the sources said. Multiple global financial investors, including US private equity firm TPG which has a strong healthcare focused portfolio, could also invest in the combined entity if the merger goes through.
“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 investment banker told ET on condition of anonymity.
The sources declined to speak on record, as they are either part of the ongoing 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 complete with Reliance,” a second source said.
Reliance’s yet-to-be announced acquisition of Netmeds for an estimated $120 million is a catalyst for other players such as PharmEasy and Medlife to explore merger and acquisition negotiations, multiple sources told ET.
The Mumbai-based PharmEasy – backed by Temasek, CDPQ and Orios Venture Partners –could acquire its Bengaluru-based rival in a primarily stock deal valued at $120-$150 million, the sources said. Multiple global financial investors, including US private equity firm TPG which has a strong healthcare focused portfolio, could also invest in the combined entity if the merger goes through.
“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 investment banker told ET on condition of anonymity.
The sources declined to speak on record, as they are either part of the ongoing 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 complete with Reliance,” a second source said.
Sandip Ginodia , CEO
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