Mumbai-based Piramal Enterprises said on Saturday that US-based investment firm Carlyle Group will purchase a 20 per cent stake in its pharmaceutical unit for around $490 million (Rs 3,706.36 crore at one rupee = $75.64). Piramal Enterprises will integrate its pharmaceuticals businesses into its wholly-owned subsidiary Piramal Pharma, which will use the capital raised through the deal to accelerate its organic and inorganic growth plans. The conglomerate said the transaction, expected to close in 2020 and subject to regulatory clearance, is one of the largest private equity deals in the country’s pharmaceutical sector.
In a regulatory filing early on Saturday, Piramal Enterprises said the deal values its pharma business at an enterprise value of $2,775 million, with an upside component of up to $360 million depending on the company’s performance in the current financial year.
“We are pleased to announce the strategic growth investment by Carlyle, a marquee global investor, in Piramal Pharma. This is an affirmation of the strength of our ability to build new, attractive and scalable businesses with a significant runway for continued organic growth and opportunities for consolidation,” said Ajay Piramal, chairman, Piramal Enterprises.
The final amount of equity investment will depend on the net debt, exchange rate and performance against the pre-agreed conditions at the time of closing of the deal.
“This investment marks the beginning of an important partnership with the Piramal family, and further underscores our commitment to the Indian market,” said Greg Zeluck, co-head, Carlyle Asia Partners advisory team.
As part of the deal, Piramal Pharma will include end-to-end contract development and manufacturing business Piramal Pharma Solutions, hospital generics business Piramal Critical Care, the group’s consumer healthcare business, and Piramal Enterprises’ investment in its joint venture with Allergan India.
Carlyle has invested more than $2.5 billion in India as of March 31, 2020, the statement added.