Mobitel dials for healthcare biz with Rs. 733 m bid to buy eChanneling

• Makes voluntary offer to buy 87.6% held by Singapore firm; Will trigger SEC Mergers and Takeovers Code to acquire 
• balance shareholding
• Share Sale and Purchase Agreement signed with deal price at Rs. 6 per share; Prior to announcement eChanneling trades Rs. 9.20 and Rs. 8.80

Sri Lanka Telecom Mobitel is dialing for more business by foraying into the healthcare business with a Rs. 733 million bid for pioneering venture eChannelling Plc .

The Company yesterday announced a voluntary offer to buy an 87.6% stake or 106.97 million shares at Rs. 6 each from major shareholder Senior Marketing System Asia Ltd of Singapore (SMS). Mobitel will also buy the remaining shareholding within the total issued capital of 122.131 million shares of eChannelling.

Mobitel and SMS have on 5 September entered into a Share Sale and Purchase Agreement. The Singapore firm has undertaken that it will accept the offering full. 

The announcement was made after the market had closed. eChanneling traded yesterday between a high of Rs. 9.20 and a low of Rs. 8.80 before closing at Rs. 9, down by 10 cents. Net Asset Per Share of eChanneling was Rs. 1.54 as at 30 June 2016, up from Rs. 0.95 a year earlier and Rs. 1.42 as at December 2015. It had Rs. 253 million in assets whilst liabilities amounted to Rs. 66 million.

In the year ended on 31 March 2016, eChanneling revenues were Rs. 217 million, up from Rs. 163 million. Profit from operations was Rs. 101 million as against Rs. 99.5 million in the previous year. After tax profit improved from Rs. 64 million to Rs. 77 million.

The Company has around 1,647 shareholders and the public float is 12.4%.

eChannelling facilitates over 700,000 appointments per year. The number of hospitals acquired

as of 31st March 2016 was 155 among which 123 are private hospitals and 22 are private Ayurveda

hospitals. In FY16 it started a pilot project with Maharagama Cancer Hospital to provide the booking system to the hospital. This is an initial step to tap into Government Hospitals in the future. 

Mobitel the second largest mobile telecom player’s acquisition of eChanneling will significantly strengthen its position as the latter is the market leader in the booming healthcare consultation booking business. Having failed or ignored eChannelling as an acquisition, mobile telecom leader Dialog developed its own solutions and has tied up with several private hospitals to roll out its version of the digital health portal “Doc 990.”

The Doc990 Digital Health Portal provides medical appointment booking facilities for all hospitals of the Asiri Hospitals Group (Asiri Surgical, Asiri Medical and Asiri Central),Nawaloka Hospital - Colombo, Durdans Heart Centre, Ninewells Hospital, New Philip Hospital Kalutara, Union Hospital Malabe and Singhe Hospital Ratnapura.