Indian hospital group acquires hip/knee assets from Consensus Orthopedics for $11.45M

Hospital chain Shalby to buy implant assets of US firm Consensus Orthopedics (VCCircle)

Multi-speciality hospital chain Shalby Ltd said it will acquire implant assets of California-based Consensus Orthopedics for $11.45 million (Rs 83.7 crore). 

Vikram Shah, chairman of Shalby, said in a stock market disclosure that the acquisition will help the Ahmedabad-based hospital chain to diversify its core hospital healthcare services business into related and high growth implant product offerings. 

Shalby expects its implant sales to account for 15% of total revenues by fiscal 2022-2023. Shalby’s total revenue in fiscal 2019-20 was Rs 486 crore. https://staticassets.vccircle.com/dfp-ads/content_ad.html

The acquired assets comprise of inventory including knee systems, mobile bearing knee systems, hip systems and revision knee systems, and plant and equipment. 

The assets will be acquired by Shalby Advanced Technologies Inc, a wholly owned subsidiary of Mars Medical Devices. Mars Medical in turn is a wholly-owned unit of Shalby. 

Consensus Orthopedics designs and manufactures orthopaedic implants and instruments with sales predominantly in North America. 

As part of the transaction, Shalby has appointed Daniel Hayes, a former CEO and founder of Consensus, as the CEO of Shalby Advanced Technologies. He will immediately re-engage with existing customers, build a new sales pipeline and selectively invest in innovative technologies and patented products. 

Shalby also said it has appointed Sushobhan Dasgupta as its vice-chairman and global president. Prior to this, Dasgupta was at Johnson & Johnson Medical Asia Pacific. 

Shalby, which was listed on the stock exchanges in 2017, focuses on primary and secondary medical and surgical services. 

The company says it currently operates a chain of 11 multispecialty tertiary hospitals across India. It has an aggregate bed capacity of over 2,000 hospital beds. 

In February 2016, Shalby had signed a joint venture with Dubai-based RAK Hospitals for joint replacement surgeries. 

In 2011 and 2012, it acquired a string of small hospitals, such as Vrundavan Hospital and Research Centre, Usha Hospitals and Krishna Hospital, as per VCCEdge 


Shalby gains on acquiring implant assets from Consensus Orthopedics (Business Standard)

Shalby gained 1.31% to Rs 162.40 after the company announced that it has entered into a definitive agreement to acquire certain assets from California- based Consensus Orthopedics, for a total cash consideration of $11.45 million.

The assets were acquired by Shalby Advanced Technologies Inc, a wholly owned subsidiary of Mars Medical Devices, which is a wholly owned subsidiary of Shalby. The announcement was made on Saturday, 15 May 2021.

The acquired assets are primarily comprised of inventory and plant and equipment. Product inventory includes knee systems, mobile bearing knee systems, hip systems and revision knee systems. The manufacturing plant and equipment consists of machining & finishing (60,000 components per annum), inspection (75,000-80,000 components per annum) and cleaning, packaging & sterilization (1,50,000 components per annum). The manufacturing site is USFDA certified and has ISO certification 13485:2016. In addition, an experienced team of over 40 consensus employees will be joining Shalby as part of this transaction.

Consensus Orthopedics designs and manufactures orthopedic implants and instruments with sales predominantly in North America. Key customers include hospitals, surgeons and wholesale distributors. Consensus has a long-standing track record of innovation and completed over 1,60,000 joint replacement procedures with zero recalls in the company’s history, as per the press release.

Shalby engages in hip and knee replacement surgeries in India with a 15% market share in private hospitals offering joint replacement. The strategic and financial rationale for this acquisition will enable it to procure quality implants at a competitive price for its own consumption in India, build on the existing asset platform to enhance implant sales across the US and international markets and diversify its business and revenues mix. In FY2023 implant sales is expected to account for 15% of total revenues. The transaction is expected to be earnings accretive in FY2023.

The consideration for the acquired assets was $11.45 million in cash and has been funded by a combination of internal accruals and US Dollar denominated bank borrowings.

Meanwhile, after market hours on Friday, 14 May 2021, Sushobhan Dasgupta had been appointed as an additional director (non-executive) designated as vice chairman and global president of the company from Monday, 17 May 2021.

Shalby is India’s leading multi-specialty hospital. It currently operates a chain of 11 multispecialty tertiary hospitals across India with an aggregate bed capacity of over 2,000 hospital beds.