Business tycoon Harry Jayawardena-controlled Melstacorp Group has acquired Ishara Nanayakkara-fame Browns’ hospital business for Rs. 1.6 billion in a move to get aggressive in the booming healthcare industry.
Melstacorp PLC said its fully-owned subsidiary Melsta Healthcare Colombo Ltd. bought the entire shareholding of Browns Health Care Ltd. from Brown and Company on 19 February for Rs. 1.6 billion.
Browns Health Care is in the business of operating a multispecialty hospital under the brand Browns Hospitals and wholly owns the 70-bed Browns Healthcare North Colombo Ltd.
Brown’s healthcare revenue in FY19 was Rs. 868 million, up from Rs. 709 million. Gross profit improved to Rs. 636 million from Rs. 510 million. The sector achieved a post-tax profit of Rs. 105 million as against a loss of Rs. 21 million in FY18. Assets amounted to Rs. 2.7 billion and liabilities were Rs. 642 million. Browns had originally invested Rs. 180.7 million in the healthcare subsidiary shareholding of 1.8 million shares.
Analysts said the acquisition was strategic as Harry Jayawardena has been keen on the healthcare sector after it once part owned and managed and eventually exited Lanka Hospitals.
Melstacorp also manages the famous Joseph Fraser Hospital.
Recently Melsta Laboratories, a fully-owned subsidiary of Melstacorp, commenced operations as the pioneering stand-alone laboratory network in the country.
Melsta Laboratories recently opened their branches in Colombo, Kandy, Karapitiya and Kurunegala, complete with the highest quality equipment and professional expertise.
Melsta Laboratories has also formed a technical partnership with Asia’s Biggest and most trusted Laboratory network, SRL Ltd.
Browns Hospitals is a fully-fledged, 70-bed hospital equipped with the latest technology in medical diagnostics comprising of a modern endoscopy unit, ultrasound scanning, CT and MRI scanning, and advanced medical and surgical therapeutic technology.
It is a multi-specialty Hospital in Ragama and first in a chain of secondary care general hospitals and diagnostic centres which are dedicated to provide high quality care through comprehensive, integrated clinical practice and personalised care to every patient.
This is the first and only hospital to receive ISO 9001:2015 certification from the Sri Lanka Standards Institute for Healthcare.
In the 2018/19 Annual Report, Browns said the Hospital has shown remarkable progress and achieved its highest ever top-line and bottom-line figures. In-patient and Outpatient count increased significantly, as did the number of surgeries, which delivered significant revenue to the hospital.
However, the regulatory environment has become increasingly challenging in recent years with the government mandating price reduction of drugs, temporary price ceilings on certain tests and pursuing price controls for private hospital room rates and charges for basic procedures. The healthcare industry is grappling with a shortage in skilled professionals including doctors, specialists, qualified pharmacists, nursing staff and technical staff.
Closely monitoring each and every business unit on its contribution towards the hospital has been a key to success for Browns Hospitals. Excelling on clinical aspects and keeping the operational cost at the lowest has been critical for the hospitals success.
“We believe that the key to future success is in the introduction of new specialties to the hospital. Surgical and medical units and lab sample collection centres have been identified as the key growth areas for Browns Hospitals. Starting new surgical procedures and improving bed capacity is also been looked at for growth perspectives,” the company said.
(FT)