MSPEA backs Indian medical devices, health foods businesses
Morgan Stanley Private Equity Asia (MSPEA) has completed two investments in India, committing INR1.6 billion ($25.1 million) to medical devices business Sahajanand Medical Technologies (SMT) and INR1.52 billion to health foods producer Southern Health Foods.
The investment in SMT, the country’s leading manufacturer of stents used in heart surgery, is part of a INR2.3 billion round in which domestic GP Samara Capital also participated. Samara previously committed up to $25 million to SMT in 2016, with a view to helping the company develop its product line.
Established in 1998, SMT was the first Indian company to produce coronary stents. It now also supplies renal stents, balloon catheters (used to compress plaque in clogged arteries), and other accessories that feature in cardiovascular procedures to customers in more than 60 countries. The company has a manufacturing facility in Gujarat and two R&D centers, including one in Ireland.
The proceeds of the investment will be used to support organic growth, pursue acquisitions, and for an R&D program intended to further expand the company’s product portfolio.
“The increasing burden of lifestyle diseases combined with the push towards local manufacturing backed by the best in class R&D has led to a significant rise in the use of domestic medical implants. SMT’s high end technology and focus on R&D will make it a key beneficiary of the rapid expansion in treatment volumes and medical infrastructure,” said Arjun Saigal, co-head of India at MSPEA.
The other investee, Southern Health Foods, manufactures ready-to-cook millet-based breakfast cereals, instant drink mixes, infant foods, and dried fruits. Its flagship product is Manna Health Mix, which is a version of sathu maavu, a traditional dish of cereals and pulses cooked in hot milk.
The company, founded in 2000, is known for producing foods that are 100% natural, high in nutritional value, and gluten free. It works with a network of more than 500 distributors that supply over 67,000 retail outlets in 350 towns.
MSPEA’s capital will go towards expanding Southern Health Foods in south India as well as facilitating an exit for existing investor Fulcrum, which provided INR300 million in funding three years ago. Fulcrum specializes in pharmaceuticals and healthcare investments in India.
MSPEA is currently investing its fourth pan-regional fund, which closed at $1.7 billion in 2014. The firm is reportedly targeting $2 billion for Fund V in addition to raising a dedicated Thailand fund. Recent investment activity in India includes re-upping in Five Star Business Finance and Janalakshmi Financial Services and backing pharmaceuticals player ZCL Chemicals.
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