MUMBAI: Global private equity fund Morgan Stanley will pick up around 20% stake in ZCL Chemicals Ltd, formerly known as Zandu Chemicals, of the Parikh family for about Rs 180 crore, two people familiar with the development told ET.
ZCL, which the Parikh family had sold to Emami in 2008 and bought back in 2009, manufactures active pharmaceuticals ingredients (APIs) and other chemical intermediates for the pharmaceutical industry.
“Morgan Stanley private equity has signed an agreement to purchase the minority stake in ZCL. An announcement is likely soon,” a person involved in the deal said.
The deal values ZCL at Rs 900 crore, said another person involved in the proceedings.
Nihar Parikh, executive director of ZCL, declined to comment on the fund raising and stake sale plans of the company. A spokesperson for Morgan Stanley declined to comment to an ET query.
According to a source, the company that is growing at 30% CAGR for the past five years, is raising money to fund its expansion plans where new capacities will be created. The company will also alternatively look at growing inorganically by acquiring other smaller companies.
When the Parikh family bought back the chemicals business from Emami Group in 2009 a year after selling ZanduBSE -1.35 % Pharmaceutical Works, the business had a turnover of Rs 32 crore. Incorporated in 1991, ZCL Chemicals is into manufacturing and exports of fine chemicals, advanced drug intermediates and active pharmaceutical ingredients (API).
Within APIs segment, it caters to a wide category of therapeutic segments including central nervous system (CNS), anti-viral (Anti-HIV), pain management and control substances.
The company has an USFDA approved plant at Ankleshwar in Gujarat along with research and development capabilities. In 2009, it had formed a joint venture with Nagase & Co of Japan. The Parikhs terminated the venture and brought back shares issued to Nagase in February 2014, citing changes in its priorities.
For the year ended March 2014, approximately 97% of the ZCL’s sales were derived from exports to various countries and majority to regulated markets.
Source: Economic Times