Private equity fund Baring PE Asia is in talks to buy a controlling stake in Actis Capital-backed steroid maker Symbiotec Pharmalab Ltd, two people familiar with the development said.
PE fund Actis now holds a 70% stake in the Indore-based pharmaceutical company.
Baring PE, which has $10 billion worth of assets under management (AUMs), is among the largest Asia-focused alternative asset management firms.
The deal may value Symbiotec at $300-350 million, with London-based Actis standing to make $210-245 million, one of the two people cited above said on the condition of anonymity. Actis bought the stake in the active pharmaceutical ingredients (APIs) maker for $48 million in 2013.
Actis had hired investment bank Rothschild to sell the stake last year, but potential buyers backed out citing the high valuation, said the first person. Three or four buyout funds had shown interest initially, he added.
Actis is likely to bring down the valuation to the $300 million range, the second person said on the condition of anonymity. Actis is looking to sell its majority stake in Symbiotec at a valuation of $400 million, and is in discussions to hire an investment bank, Mint reported in September.
Global PE fund Advent International and Chinese strategic investor Fosun International Ltd were in separate talks for the stake, an April report in Mint said.
Anil Satwani, founder of Symbiotec, and his family own the balance 30% stake. It is not sure if Satwani and family will sell their stake.
Symbiotec is one of the largest global firms in the cortico–steroid and steroid–hormone segment. Founded in 1995, it has 860 employees, with two manufacturing plants in Indore. Sales in 2015-16 remained unchanged at $62 million, according to its website. Spokespersons for Actis and Baring PE Asia declined to comment. Anil Satwani, managing director of Symbiotec, did not respond to an email.
With its focus on buyout opportunities, Baring PE Asia has acquired several large assets in India. In 2015, it acquired a controlling stake in CMS Info Systems Ltd, one of India’s largest cash-management companies, and acquired a majority stake in software and IT services company Hexaware Technologies for Rs1,687 crore in 2013.
Actis, which had sold its investment in Paras Pharmaceuticals Ltd in one of the largest exits in India, has been trying for a similar exit from Symbiotec. In 2010, it had sold its controlling stake in Paras Pharmaceuticals Ltd to Reckitt Benckiser Group Plc. Actis Capital, which acquired 63% of Paras Pharma in separate tranches of $150 million, sold the stake for $726 million.
The healthcare sector has been an investment favourite for private equity investors in India, offering sizeable returns and easy exits.
India focused PE fund ChrysCapital had gained about 10-fold return on its original investment when it sold its 11% stake in Mankind Pharma to Capital International Private Equity Fund in 2015. ChrysCapital had invested $24 million in Mankind Pharma in 2007.
Source: Mint