The Carlyle Group, a global investment company, is said to make an investment of 490 million dollars in Piramal Pharma, a wholly-owned subsidiary of Piramal Enterprises Limited. Therefore, gaining a 20 percent stake in the pharma company.
In a filing on June 27, the company said that the transaction values the pharma business at an enterprise value of 2.7 billion dollars along with an upside component of up to 360 million dollars depending on the firm’s performance in FY21.
Further, the company in the filing stated that based on the EV, exchange rate, and pharma net debt as on March 31, 2020, the estimated equity investment for Carlyle’s 20 percent stake in the company would amount to 490 million dollars.
Moreover, the final amount of equity investment will be subject to the net debt, exchange rate, and performance against the pre-agreed conditions at the time of sealing the deal.
As per the filing, Piramal Pharma will comprise Piramal Pharma Solutions, end-to-end contract development, and manufacturing business; Piramal Critical Care, a complex hospital generics business selling specialized products across 100 countries; Consumer Products Division, a consumer healthcare business selling over-the-counter products in India; and PEL’s investment in the joint venture with Allergan India, a leader in ophthalmology in the domestic market and Convergence Chemicals Private Limited.
“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. This infusion of funds will further strengthen our balance sheet and provide us with a war chest for the next phase of our strategy,” said Ajay Piramal, Chairman, Piramal Enterprises Limited.
“We are excited to work with the company’s experienced management team and will leverage our global network, extensive knowledge of the healthcare sector, and operating experience to seek to expand its platform, develop strategic opportunities and facilitate broader market access,” said Neeraj Bharadwaj, Managing Director, Carlyle Asia Partners advisory team.
The company stated in the filing that this transaction is estimated to conclude in 2020 and is one of the biggest private equity deals in the Indian pharmaceutical sector. However, it is subject to customary closing conditions and regulatory approvals.