Skanray to raise Rs. 400 crore of fresh capital; to fund inorganic growth among others
Jaipur October 11th 2021: Skanray Technologies (Skanray) proposes to raise Rs. 400 crore of fresh capital to fund inorganic growth; fund working capital requirements; finance investment in subsidiaries; fund capital expenditure requirements of the Company; and general corporate purposes.
Skanray is among the key Indian medical device players engaged in designing, development, manufacturing and marketing of medical devices (Source: CRISIL Report). In Fiscal 2020,Skanray sold products and services to over 1,830 customers in 20 countries. It has an extensive in-house research and development (“R&D”) team that has been granted 27 patents, 49 trademarks, and 11 design registrations as of December 31, 2020.
Skanray’s inorganic growth strategy seeks to enhance its technological capabilities and expand the modalities that it operates in — to stay relevant not only with emerging technologies, but also complementary technologies. Skanray intends to identify acquisition targets with expertise in areas such as ultrasound, in-vitrio diagnostic (IVD), technologies used in operating theatres, home-health technologies, amongst others. These acquisition targets will enable it to provide customers a suite of products that will fully equip their healthcare service organizations. It intends to provide the much required synergies such as technology expertise, global regulatory compliance capabilities, supply chain capabilities and global distribution network to such acquisitions to equip them with the right tools to quickly ramp up their operations. These acquisitions will also allow Skanray to enhance usability of existing products, provide advanced remote connectivity for monitoring remote patients and enable cross-pollination of modules between existing and acquired products.
Since the inception, 14 years ago, Skanray has acquired fully or majority stake in, and successfully integrated 5 businesses with its own.
Skanray has been successful in selectively identifying, completing and integrating strategic acquisitions in the past. Post its acquisitions, Skanray have been able to develop synergies, integrate and upgrade the technologies of the companies that it acquired. It has leveraged these existing businesses and their brand equity to enter into new business segments, geographies and expand product offerings.
Skanray’s past acquisitions have also complemented its in-house product design and development capabilities, by bringing in strong IP–backed expertise in the areas of digital imaging, X-Ray tubes, public access products amongst others.
Skanray’s product-driven acquisitions include the acquisition of the medical equipment business of Larsen and Toubro Limited to grow its PMS and ESU product portfolio, which form part of its critical care segment, and to leverage the pan-India distribution network of Larsen and Toubro’s business.
Skanray acquired Pricol Engineering Industries Limited’s medtech business in 2013 to gain access to their RMS product portfolio. Its market-driven acquisitions include the acquisition of CEI-Italy (CompagniaElettronicaItaliana), an Italian X-ray tube manufacturer, to gain a presence in the European market and to vertically integrate radiology product line for which X-ray tubes are a critical component.
Skanray’s acquisition of Cardia International A/S, manufacturer of AED, was similarly driven to gain access to a distribution network in Europe. These acquisitions allowed Skanray to expand its presence across India and globally and strengthened its capabilities in key modalities, i.e. critical care. It has subsequently leveraged these acquired capabilities to grow its operations. For instance, through its acquisition of CEI-Italy, it was able to vertically integrate its radiology product line and distribute radiology devices through the same distribution channels in Europe.
Since Skanrayhas been able to successfully acquire and integrate companies in the past, it intends to continue to grow inorganically through acquiring and integrating companies that complement its competencies and enable it to achieve business objectives.
Skanray intends to continue expanding its range of product offerings by deepening and widening its portfolio to increase business from existing clients as well as acquire new clients. One of Skanray’s strategies is to increase its customer and revenue from geographies such as the United States, Europe and other emerging markets.
To achieve this, Skanray seek to acquire entities which have a geographical presence in these regions. This would help it to either establish its presence or enhance service offerings in these regions. Additionally, Skanray looks at acquisitions that help it obtain regulatory clearances in these markets that typically have long lead times.
Of the Rs. 400 crore of fresh capital, Rs. 130 crore will be used to fund inorganic growth; Rs. 70 crore each to fund working capital requirements; and finance investment in subsidiaries; Rs. 41.9 crore to fund capital expenditure requirements of the Company; and the rest for general corporate purposes.
Skanray is a multi-product company offering a diversified portfolio of products, including patient monitoring systems, cardiology devices, respiratory management systems and radiology/ imaging systems, to hospitals, OEMs and for personal medical use/ retail sale globally. Its products are designed and developed in-house based on intellectual property that it owns.Skanray’s R&D activities are focused on developing modular technology platforms which can be used across multiple products in its portfolio. Skanray’s growth has been supplemented by strategic acquisitions designed to improve its ability to take advantage of growth opportunities in the medical device industry.