Carlyle pursues control of India's SeQuent for $210m
The Carlyle Group has reached agreements that could see it pay INR16.3 billion ($216 million) for up to 74% of Indian animal healthcare services provider SeQuent Scientific.
The private equity firm has agreed to buy shares from a number of existing investors for INR86 apiece, according to an open offer document. This would result in it obtaining more than half of the company’s voting rights, triggering a mandatory open offer for a further 26% of shares held by public shareholders. SeQuent's stock closed at INR80.25 on May 8, the day of the announcement.
In total, Carlyle could acquire up to 190.2 million shares in the company. Other PE investors that have agreed to sell their shareholdings include Agnus Capital and Ascent Capital.
Established in 2007, SeQuent started out as a manufacturer of pharmaceutical products for animals and humans. It went public in 2008 through a reverse merger with PI Drugs & Pharmaceuticals. The company ended six years of straight losses in 2018, which coincided with a move to focus exclusively on animal healthcare.
In 2014, SeQuent had launched Alivira Animal Health, a subsidiary that sells animal healthcare products with manufacturing facilities in India, Turkey, Spain, Germany, and Brazil. The company sells active pharmaceutical ingredients (APIs), formulations and analytical services in over 100 countries. Apart from India, Turkey counts as a significant single-country market for the company.
SeQuent posted INR11.6 billion in revenue for 2019, a 17.2% year-on-year increase. Net profit fell 31% to INR851 million.
“We see strong growth potential in the global animal health industry, including the livestock segment where SeQuent is operating, thanks to increasing demand for animal protein, rising awareness of food safety, and growing disposable income,” said Neeraj Bharadwaj, managing director at Carlyle, according to the statement.
According to animal health industry research firm Vetnosis, the global market for animal healthcare was estimated to be worth $33.5 billion in 2018 with pharmaceutical products contributing nearly two-fifths of that figure.
In India, Carlyle recently secured two partial exits from Metropolis Healthcare and SBI Cards, respectively. The latter deal - an IPO that generated an 8x return for the private equity firm - was executed just a few days before India finalized a nationwide shutdown.
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