Mumbai: Private equity firm Actis Capital is looking to sell its majority stake in Indore-based Symbiotec Pharmalab Ltd, according to two people familiar with the development.
The deal would value Symbiotec at $400 million, with London-based Actis, which owns 70%, standing to make $280 million, one of the two said on condition of anonymity. Actis bought the stake in the bulk-drug maker for $48 million in 2013.
A spokesperson for Actis declined to comment. Anil Satwani, managing director of Symbiotec (his family owns the residual 30% stake), did not respond to an email sent on Thursday.
If concluded, the transaction will be Actis’s second major exit in six years. In 2010, it sold its 63% stake in Paras Pharmaceuticals Ltd to Reckitt Benckiser Group Plc. in a deal that valued the company at $726 million.
The healthcare sector has been an investment favourite for private equity investors in India, offering sizeable returns and easy exits.
“The pharmaceuticals space has a comparatively better track record in terms of successful exits compared to some of the other sectors, and this is one factor which continues to drive incremental interest in the sector,” said Sanjeev Krishan, transaction services and private equity leader at PricewaterhouseCoopers India.
Actis is in discussions to hire an investment bank to start the sale process, according to the first person.
“Actis will start discussions with private equity buyout funds as well as global pharmaceutical companies and expects to repeat the successful exit it had in Paras Pharma,” the second person said, also on condition of anonymity.
Actis had acquired its 63% stake in Paras in two tranches for $150 million.
Established in 1995, Symbiotec is India’s largest and Asia’s second largest steroid-hormone active ingredient producer.
The company ended 2014-15 with revenue of $68 million (Rs450 crore) according to its website.
Actis currently manages $6.3 billion in assets.
Most of the bets in Indian drug makers by private equity funds have paid off.
Private equity firm KKR & Co., which invested $200 million in buying an undisclosed stake in Gland Pharma Ltd in 2013, sold its stake to Shanghai Fosun Pharmaceutical (Group) Co. in a deal that valued the company at $1.4 billion in July.
The public market became the most preferred route for exits in India in the second quarter (ended 30 June) of 2016, with a total exit value of $713 million in 17 deals, according to a September report by PricewaterhouseCoopers.
Exits by private equity firms in the second quarter of 2016 were among the lowest in recent history, with $1.2 billion in 40 deals, a 70% drop from the second quarter of 2015 ($4 billion in 71 deals), the report said.
Recent Articles on M&A
Source: Mint
