Private equity firm Warburg Pincus is in advanced talks to acquire Chennai-based medical equipment manufacturer Appasamy Associates, said people aware of the development.
US-based Warburg has signed an exclusivity agreement with Appasamy and the due diligence has started, they said. The promoters of Appasamy are expecting a valuation of ₹4,000-4,500 crore, the people cited earlier said, adding that Warburg Pincus plans to acquire 65-70% stake in the company and have the current management run the company.
Investment bank Edelweiss Finance is managing the sale process, the sources said.
Appasamy Associates’ executive director Arvind Kasthuri declined to comment. A query sent to Warburg Pincus remained unanswered.
ET had reported in March that Appasamy Associates’ promoters plan to sell a controlling stake in the company and have been involved in early-stage talks with private equity investors.
The 45-year-old company is a leading manufacturer and distributor of ophthalmic equipment, microscopes, lasers, intraocular lens (IOL) and microsurgical instruments. It is the exclusive distributor for Canon’s medical equipment in India.
In FY23, Appasamy Associates had posted a revenue of ₹500-550 crore with an Ebitda of ₹130-150 crore, said sources. This year, it is expecting ₹350 crore Ebitda.
India is one of the largest eyecare markets by volume, where more than 6.5 million people undergo cataract surgery every year.
The Indian intraocular lens market is dominated by global brands such as Alcon, Bausch Health, Biotech Healthcare Holding GmbH, Carl Zeiss AG, Hoya Holdings, Johnson & Johnson and French lens maker EssilorLuxottica SA.
Intraocular lens is implanted in the eye as part of a treatment for cataract or myopia.
Among the Indian brands, Appasamy is the market leader with about 75% market share. The other Indian brands are Aurolab and Locare.
If the deal materialises, it would be Warburg Pincus’ second acquisition in southern India in the last several months. Last week, the PE firm acquired about 67% stake in Coimbatore-based bath fittings brand Watertec India at ₹2,600-2,800 crore ($340 million) valuation.
