Advent to acquire Indian pharma player
Advent International has agreed to buy a controlling stake in Indian pharmaceutical company RA Chem Pharma.
The seller is Micro Lab Industries, a healthcare company with operations in over 40 countries and reported annual revenue of INR30 billion for the 2018 financial year. Micro Labs acquired a majority stake in RA Chem Pharma in 2017. Advent has not said how much it is paying for the business, but Indian media has reported the value as approximately INR10 billion ($134 million).
Founded in 2003, RA Chem Pharma produces active pharmaceutical ingredients (API), pellets, and formulations. Its portfolio ranges from pharmaceuticals to niche areas of animal health and cosmeceuticals. The company has four manufacturing units, two R&D labs, and a clinical research facility. Advent plans to help RA Chem Pharma scale organically and inorganically to become a leading API platform in the country.
“We are impressed with RA Chem Pharma’s niche product portfolio and business trajectory. It is uniquely positioned to achieve further growth, in what is a highly fragmented market, given its vertically integrated capabilities, extent of backward integration and robust near-term pipeline.” said Pankaj Patwari, a director at Advent International.
Over the last year, Advent claims to have invested over $1.7 billion globally in six healthcare companies. In India, it has been active in healthcare, consumer, and financial services. Deals include biopharmaceuticals supplier Bharat Serums & Vaccines, snacks manufacturer DFM Foods and Aditya Birla Capital, the holding company of the financial services businesses of Indian conglomerate Aditya Birla Group.
Several other private equity firms have secured control deals in India's healthcare sector this year, primarily through tender offers for public companies. CVC Capital Partners now owns cancer center operator Healthcare Global Enterprises, while The Carlyle Group picked up animal healthcare specialist SeQuent Scientific. KKR has also agreed to buy a majority stake in J.B. Chemicals & Pharmaceuticals.
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