While the two parties did not disclose the financial details of the transaction, a person aware of the development said that the deal values RA Chem at around ₹1,000 crore
Adding to a spate of private equity investments in the Indian pharma sector this year, PE firm Advent International on Thursday said that it has signed a definitive agreement to acquire a controlling stake in RA Chem Pharma Ltd, a vertically integrated pharmaceutical company promoted by Micro Labs Ltd, the PE investor said in a statement.
While the two parties did not disclose the financial details of the transaction, a person aware of the development said that the deal values RA Chem at around Rs1,000 crore.
Founded in 2003 in Hyderabad, RA Chem's core focus is API, however, over time the company has forward integrated into pellets, formulations and clinical research to provide end-to-end offerings to its customers. Its product portfolio ranges from pharmaceuticals to niche areas of animal health and cosmeceuticals; supported by four manufacturing units, two R&D laboratories and a clinical research facility.
Advent has committed over $1.7 billion globally in six companies across the healthcare sector in the last 12 months. The firm has also committed more than $700 million in seven Indian businesses over the same period in varied sectors such as healthcare, consumer, and financial services amongst others.
“We continue to be excited about India’s pharmaceutical landscape and investing in RA Chem Pharma will further strengthen our presence in the sector. We aim to build one of the leading API platforms in India and will leverage our financial and operational resources globally to scale RA Chem Pharma both organically and inorganically," said Shweta Jalan, managing director and head of India at Advent International.
In addition to RA Chem, Advent's other investments in the last 12 months include Bharat Serums and Vaccines, Aditya Birla Capital and DFM Foods.
Investment bank Nomura acted as the sole financial advisor to Micro Labs for the transaction.
"We strongly believe that this transaction will further build upon RA Chem’s strengths to continue its journey to deliver high quality, niche and specialized products to its customers globally," said Dilip Surana, chairman and managing director of Micro Labs Ltd.
While overall PE activity in India has been subdued this year, with the exception of Reliance's Jio Platforms, on account of the covid-19 pandemic and subsequent nationwide lockdown, investors have continued to be active in writing large cheques for stakes in pharma companies.
Mint reported on 2 July that American PE firm KKR has entered into an agreement to acquire up to 54% stake from the promoters of JB Chemicals & Pharmaceuticals Ltd for round Rs3,109 crore.
Last month, private equity major The Carlyle Group said that it will acquire a 20% stake in Ajay Piramal-owned Piramal Group’s pharmaceutical business for ₹3,700 crore.
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