Online drugs retailer PharmEasy and pharmaceutical distribution company Ascent Health and Wellness are exploring a potential merger.
Sources told Economic Times that boards of both the Mumbai-based firms have given an in-principle approval for the all-stock transaction to go through. PharmEasy and Ascent Health and Wellness count a number of private equity and venture capital investors among their ranks, such as Everstone Capital, Kedar Mankekar, Eight Roads Ventures and Orios Venture Partners.
Naspers, the South African investor and backer of Flipkart and Swiggy, had also held discussions to invest in the new entity formed through the merger. Sources told ET that Naspers could invest USD 100-150 million at a valuation of USD 400-500 million. Earlier this week, Mint had reported that SoftBank had also held discussions to invest in PharmEasy.
Ascent currently owns an estimated 25% of PharmEasy’s shares. Their merger is likely to see mid-market private equity firm Everstone Capital emerge as the largest institutional stakeholder with 35-38% ownership.
Ascent caters to more than 25,000 retailers across the country and works with top pharmaceutical companies, such as Zydus, Cadila, Cipla and Sun Pharmaceuticals, along with notable hospital chains, including Mumbai‘s Nanavati Hospital and Manipal Hospitals.
PharmEasy had raised USD 50 million in its Series C round in September 2018. It was reported to have earned a revenue of Rs 116 crore in FY18, up from Rs 33 crore in the previous fiscal. It’s losses too widened to Rs 97 crore in FY18, up from Rs 48 crore in the year-ago fiscal, ET reported.
Ascent Health reported a total revenue of Rs 619.65 crore in FY18, up from Rs 279.76 crore the previous fiscal. Losses for the corresponding periods widened to Rs 24.80 crore, up from Rs 3.88 crore, according to paper.vc.