KKR to buy control of Indian pharma player

The private equity firm will acquire 41.7 million shares from the founding Mody family at INR745 apiece and seek another 20.1 million from public shareholders at the same price, according to a filing. It could invest up to INR46 billion in total. The offer represents a 4.5% premium to J.B. Chemicals’ July 2 closing price of INR712.25. As of mid-morning trading on July 3, it was down 1.2% at INR706. The stock is up 65% year-to-date.

This is the third such deal in India’s healthcare space in two months, following The Carlyle Group and CVC Capital Partners’ pursuits of animal healthcare specialist SeQuent Scientific and cancer care center operator HealthCare Global Enterprises, respectively. In each case, the purchase of a controlling stake in a public company triggered an open offer for more shares.

J.B. Chemicals focuses on branded formulations for cardiac, gastrointestinal, and anti-infective treatments. Its portfolio includes four flagship brands: Cilacar, Metrogyl, Nicardia and Rantac. The company exports its branded formulations to more than 40 countries, leveraging its large-scale contract manufacturing capabilities to partner with international brands on tablets, injectables, creams and ointments, lozenges, herbal liquids, and capsules.

The company generated INR16.9 billion in revenue for the 12 months ended March 2020, up from INR15.4 billion. Over the same period, net profit rose from INR1.82 billion to INR2.68 billion.

“We are pleased that the promoters of J.B. Chemicals have selected us to take over their rich legacy and to help the company continue its expansion, which is clearly driven by its diversified product portfolio and state-of-the-art manufacturing capabilities. We believe J.B. Chemicals has an opportunity to accelerate its growth and leverage its strengths to enter into new therapeutic areas,” said Sanjay Nayar, a partner and CEO of KKR India, in a statement.

KKR will invest in J.B. Chemicals through its third pan-regional fund, which has a corpus of $9.3 billion. The firm is currently raising Fund IV and was expecting to reach a first close of about $10 billion – against a target of $12.5 billion – at the end of June. Other investments in India’s healthcare space include Max Healthcare and Radiant Life Care, which collectively comprise the largest hospital network in North India.

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• Topics
• South Asia
• Healthcare
• Buyouts
• India
• Pharmaceuticals
• KKR