New Delhi, July 6 -- Neuberg Diagnostics Pvt Ltd, which is backed by healthcare entrepreneur GSK Velu, has acquired a diagnostic lab chain that operates in western India as it seeks to accelerate growth before a planned initial public offering, three people familiar with the development told VCCircle.

Neuberg, which is also looking to acquire a New Delhi-headquartered company, has bought a majority stake in Mumbai-based NM Medicals, a provider of radiology, cardiology and pathology-related checkups, according to one of the persons cited above, who spoke on the condition of anonymity.

The other two people confirmed the transaction, without providing details.

VCCircle first reported in August 2024 that Neuberg and another company, MedGenome, were among a host of potential suitors for NM Medical, which is operated by NM Diagnostics Pvt. Ltd. VCCircle then reported in December that Neuberg had emerged as the frontrunner to acquire a majority stake in the diagnostic lab.

NM Medical, earlier known as Rahu Health and Medical Tourism Pvt. Ltd, offers checkups across its 18 centres. It has 12 centres in Mumbai and two each in Pune and Bengaluru.

The transaction could have been valued around 16-17x NM Medical's earnings before interest, tax, depreciation and amortisation, the first person cited above said, noting that the company likely generated an operating profit of Rs 50 crore in the last fiscal year on revenue of about Rs 200 crore. This would put the deal value around Rs 800-850 crore. VCCircle couldn't independently verify this information.

According to VCCEdge data, NM Medical's standalone revenue from operations rose 34% to Rs 132.7 crore while EBITDA jumped 87% to Rs 41.5 crore in 2024-25. Between FY21 and FY25, the company's revenue grew at a compound annual rate of roughly 31%, while EBITDA expanded at a CAGR of 50%, VCCircle calculations show.

Mid-market boutique investment bank o3 Capital had been helping NM Medical scout for potential investors.

Email queries sent to NM Medical and Neuberg remained unanswered till the time of writing this article.

The development comes soon after VCCircle reported last week that Neuberg had emerged as the frontrunner for a majority stake in Delhi-headquartered Mahajan Imaging & Labs.

Neuberg also raised Rs 940 crore in January this year from Kotak Strategic Situations India Fund II. The funds were meant to support its inorganic expansion strategy and scale up acquired companies under the Neuberg platform.

Previous acquisitions

Founded by industry veteran GSK Velu, who also holds key roles in Maxivision Eye Hospitals, Trivitron Healthcare, Apollo Dialysis, and Sri Kauvery Medical Care, Neuberg operates a network of more than 250 labs in as many cities. Its offerings span pathology, genetic testing, and preventive health packages. The company has claimed leadership in markets such as Gujarat and Karnataka, as well as in newborn screening and reproductive genomic testing.

Velu launched Neuberg in 2017, two years after exiting pathology chain Metropolis Healthcare Ltd by selling his stake to US private equity major Carlyle following a prolonged dispute with co-promoters. With Neuberg, Velu pursued an expansion strategy that began without any PE support.

The company has built a track record of acquiring and integrating regional diagnostics players. In 2017, it acquired five labs across India, South Africa, and Dubai. These were Anand Diagnostic Laboratory in Bengaluru, Supratech Micropath in Gujarat, Ehrlich Laboratory in Tamil Nadu, Global Labs in South Africa, and Minerva Labs Dubai. In 2023, it formed a joint venture with Pulse Diagnostics to strengthen its presence in eastern India.

In the first half of FY26, the company acquired or entered JVs with three diagnostics chains to expand its reach in southern and western India, and bolster its radiology-focused B2B category. The total cash outlay is learnt to be Rs 455.7 crore.

Dealmaking activity

The diagnostics sector has lately been seeing a rise in dealmaking amid growing awareness for preventive health checkups and increasing income levels.

Last month, VCCircle reported that the Burman family, promoters of fast-moving consumer goods conglomerate Dabur, was exploring the divestment of its diagnostics chain Oncquest Laboratories Ltd.

Recently, Redcliffe Labs acquired a diagnostic centre in Ajmer. In February, VCCircle reported that Chennai-based Aarthi Scans Pvt Ltd was set to onboard ICICI Venture as an investor. Also in February, VCCircle reported that Morgan Stanley-backed Sterling Accuris Wellness Pvt Ltd was looking to raise a fresh round of equity capital.

North India-focussed House of Diagnostics Healthcare Pvt Ltd raised funding from 360 One Asset in January while VCCircle reported in December that private equity firm Vixar, earlier known as Arpwood Partners, acquired a majority stake in Bengaluru-based dAlgnostiX Services Pvt Ltd.

Published by HT Digital Content Services with permission from VC Circle.