A consortium of Warburg Pincus and ChrysCapital will compete with TPG, Blackstone and EQT, as well as Mankind Pharma, to acquire BSV Group, formerly Bharat Serum & Vaccines Ltd, valuing it at Rs 12,000-13,000 crore ($1.4-1.5 billion), said people aware of the matter. These five have been shortlisted after non-binding bids were submitted last week.
Dr Reddy’s Laboratories may also join the fray, having sought extra time to submit a bid for the Advent International portfolio company, the people added, saying its non-binding bid is expected to be filed this week. Due diligence will continue over the next four to six weeks, before the final offers are submitted in July.
Earlier this year, Advent appointed JP Morgan and Jefferies to sell the Mumbai-based biopharma firm five years after buying a controlling stake in it for Rs 3,500 crore ($500 million).
‘Ebitda Tripled Under Advent’
After acquiring 74% in BSV from the founding Daftary family in 2019, Advent bought the remaining stake as well last year. Several PE funds — Permira, Partners Group and CVC Capital, among others — explored the opportunity but did not eventually bid due to the high valuation expectation, at 20x FY25 ebitda, likely at Rs 630-650 crore. Advent, Warburg Pincus, Mankind and ChrysCapital spokespersons did not respond to ET’s queries. Blackstone, EQT, TPG and Dr Reddy’s Labs declined to comment. Mankind partnered with long-time backer ChrysCapital last month for the acquisition of Healthium, maker of medical devices and sutures, but has chosen to go solo as of now.
WOMEN’S HEALTH FOCUS
Incorporated in 1971, BSV is engaged in the development, manufacturing and marketing of biological, biotech and pharmaceutical formulations. Its product profile comprises plasma derivatives, monoclonal antibodies, fertility hormones, antitoxins, antifungals, anaesthetics, cardiovascular drugs and diagnostic products. Three-fourths of its sales come from the women’s health segment, especially hormones used to stimulate reproductive capacity and for assisted reproduction such as in-vitro fertilisation (IVF). A fourth of the sales are from the critical care segment, including antifungals, anaesthetics and injectables, as well as a portfolio of serums against snake bites, etc, besides antibodies for those who may be immuno-compromised due to ailments such as cancer.
BSV has manufacturing units in Mumbai and Hyderabad, a research and development (R&D) unit in Navi Mumbai, and wholly-owned subsidiaries in the US, Germany, the Philippines and India, each. While the Philippines subsidiary acts as a marketing arm, the German facility has API manufacturing capabilities. The US unit serves as a hub for R&D and clinical trials. In FY24, the company clocked `480 crore ebitda on sales of `1,700 crore. It expects to hit `2,000 crore in sales in FY25.
“Under Advent, (BSV’s) ebitda has tripled,” said a Mumbai-based pharma analyst, who did not want to be identified. “The management team was changed, and operations and supply chain streamlined. The bolton acquisitions also complemented and added heft to the portfolio.”
DEAL SCENE
In March 2022, BSV acquired the human pharma division of TTK Healthcare for Rs 805 crore through a slump sale involving cash and stocks. Being heavy on infertility and gynaecology products, the portfolio was complementary to BSV’s portfolio. TTK’s top brands include Ossopan (calcium supplement), Lactare (galactagogue), infertility brands such as CCQ, Evaserve and Carni-Q, as well as respiratory drug Levokast. Domestic consolidation in the pharma sector has largely been led by PE funds.
However, homegrown drugmakers such as Aurobindo, Torrent and Mankind have been scouting for new growth opportunities in India as well as overseas. After a long gap, even DRL is looking at acquisitions for inorganic expansion. “BSV Group is a specialised player,” said the chief executive of a pharma company that evaluated it in the past.
“The sales and distribution channels are unique — fertility clinics, hospitals or government tenders. Unlike a DRL, which has R&D DNA, (in BSV,) other strategics do not have any special edge but IVF is a fast-growing segment, with high entry barriers, making the asset attractive. For PEs, the valuation ask looks quite punchy.” Mankind, Dr Reddy’s and Blackstone have examined BSV at various points in time, including prior to the Advent acquisition. DRL had been evaluating the company even before the recent sale process was launched, and has had bilateral discussions, according to people in the know. Others such as Viatris (formerly Mylan) and Cadila Health have been named as possible suitors for BSV at various points in time.
