Online healthcare aggregator PharmEasy has applied with the Competition Commission of India (CCI) to seek approval to merge with rival Medlife, filings show.
According to the filings, PharmEasy’s parent company API Holdings will acquire 100% of Medlife’s equity shares, and in turn, Medlife will get 19.59% ownership in the combined entity. The firms have filed for approval with the CCI for the proposed merger.
“The proposed combination relates to the acquisition of 100% equity shares of Medlife by API Holdings, and as consideration, the acquisition of up to 19.59% of the equity share capital of API Holdings (on a fully diluted basis), by the Medlife Promoter Shareholders and other shareholders of Medlife,” the filing read.
The valuation of the combined entity could be at around $1.2 billion, which would mean Medlife and its promoters will get a stake of about $230 million. It was earlier reported that the deal was likely to be valued at $200-$250 million.
PharmEasy had last raised funding in November 2019 in a $220 million funding round led by Temasek, when it was valued at $700 million. Medlife was reportedly valued at $450 million as of June 2019.
Founded in 2015 by Dharmil Sheth, Dhaval Shah and Mikhil Innani, PharmEasy offers medicines, healthcare products as well as diagnostic tests. Bengaluru-based Medlife provides medicines, health products, doctor consultations and tests through both its website and its app.
Soon after this, Reliance announced that it is acquiring a majority stake in Netmeds for Rs 620 crore. Amazon has launched Amazon Pharmacy in Bengaluru, and Flipkart is reportedly eyeing the market as well and is said to be building its internal team but is also in talks with PharmEasy for a partnership.
The e-pharma market has assumed greater significance due to the pandemic, but the lack of clear guidelines for the sector has led to several legal hurdles. E-pharmacy draft rules are yet to be notified, but the wave of consolidation may accelerate the process. There is no clear regulatory framework in place so far, and Amazon’s entry into the market has already been met with opposition.