Dialog Axiata PLC has given up control of Digital Health Ltd., the company behind the Doc990 health booking platform, selling a 20% stake for Rs. 374.9 million, the Daily FT reported. The transaction was disclosed to the Colombo Stock Exchange on Friday.
Digital Health will cease to be a subsidiary of the Dialog group, the Daily Mirror reported. Dialog’s retained interest will be accounted for as an associate in the group’s consolidated financial statements rather than consolidated as a subsidiary.
The three sales
Dialog’s wholly owned subsidiary Digital Holdings Lanka made two sales:
- 16.65% to Sunshine Healthcare Lanka Ltd., a subsidiary of Sunshine Holdings PLC, for Rs. 312.2 million.
- 3.35% to Nawaloka Hospitals PLC for Rs. 62.7 million, after Nawaloka exercised its right of first refusal under the existing shareholders’ agreement.
Those two sums come to Rs. 374.9 million, the stated total.
A third sale happened alongside. Sunshine Healthcare also bought the entire 5.26% holding of Ceylon Hospitals PLC, which operates Durdans Hospital, taking Sunshine’s total stake to 21.92%. Ceylon Hospitals exited by exercising tag-along rights under the shareholders’ agreement dated 28 January 2021, which allow a minority holder to sell on the same terms when a stake changes hands.
That makes Sunshine Healthcare the second-largest shareholder in Digital Health, behind Digital Holdings, for a total outlay the Daily FT puts at Rs. 410.8 million.
One figure the two filings differ on
The Daily FT prices the Durdans sale at Rs. 98.7 million. The Daily Mirror states that the stock exchange filing did not disclose the consideration for that sale.
The difference is explicable rather than contradictory. All three sales were priced at Rs. 83.31 a share, and 5.26% of a company valued at Rs. 1.87 billion is Rs. 98.4 million — so the Daily FT’s figure is consistent with the disclosed per-share price whether it was separately disclosed or derived from it. Readers should treat Rs. 98.7 million as a price implied by the terms rather than as a figure confirmed in the filing.
The valuation checks out three ways
The common price of Rs. 83.31 a share values Digital Health at Rs. 1.87 billion, and each of the three sales independently implies the same valuation:
| Sale | Stake | Price | Implied company value |
|---|---|---|---|
| Sunshine Healthcare | 16.65% | Rs. 312.2m | Rs. 1.875bn |
| Nawaloka | 3.35% | Rs. 62.7m | Rs. 1.871bn |
| Ceylon Hospitals | 5.26% | Rs. 98.7m | Rs. 1.876bn |
All three land within Rs. 5 million of each other, which is what a single agreed per-share price across three simultaneous sales should produce. At Rs. 83.31 a share, the Rs. 1.87 billion valuation implies roughly 22.4 million shares in issue.
The register before and after
| Shareholder | Before | After |
|---|---|---|
| Digital Holdings Lanka (Dialog) | 47.57% | 27.57% |
| Dialog Axiata Digital Innovation Fund | 17.09% | 17.09% |
| Dialog group total | 64.66% | 44.66% |
| Sunshine Healthcare Lanka | — | 21.92% |
| Asiri Hospital Holdings | 13.33% | 13.33% |
| Nawaloka Hospitals | 8.77% | 12.12% |
| Aartiz Technologies | 7.98% | 7.98% |
| Ceylon Hospitals (Durdans) | 5.26% | — |
Both columns sum to 100% to within rounding, and the movements are internally consistent: Digital Holdings down exactly 20 points, Nawaloka up exactly the 3.35 points it bought, Ceylon Hospitals to zero.
The notable feature of the new register is that four hospital groups now sit on it — Sunshine’s healthcare arm, Asiri, Nawaloka and, until Friday, Durdans — in a platform through which patients book appointments with doctors at competing hospitals.
What the parties say it is for
Dialog said the transaction lets it partially monetise its investment while introducing Sunshine Healthcare as a strategic healthcare partner, and that the partnership should support Doc990’s growth by combining the platform’s digital capabilities with Sunshine Healthcare’s presence in pharmaceuticals, healthcare distribution, manufacturing and retail.
Sunshine Holdings said the acquisition would expand its healthcare portfolio and strengthen the group’s presence across the same sectors plus digital health.
Not reported
Neither filing gives Digital Health’s revenue, profit or user numbers, so the Rs. 1.87 billion valuation cannot be set against the platform’s trading performance. Nothing states what Dialog originally paid for its holding, so the extent to which it has “partially monetised” at a gain or a loss is not establishable from either account.
Neither says whether Dialog intends to sell down further, nor whether control of the board changes with the shareholding — a 44.66% holder that no longer consolidates may or may not retain board control, and neither filing addresses it.
Nothing explains why Durdans chose to exit entirely while Asiri and Nawaloka stayed, Nawaloka increasing its stake. No valuation adviser, nor any condition or regulatory approval attaching to the sales, is named.