PAG acquires Indian CDMO Acme for $145m
PAG has acquired a controlling stake in Acme Formulation Private, an India-based contract development and manufacturing organization (CDMO), for approximately $145 million.
It is the private equity firm’s third substantial investment in the past 12 months and its second in the healthcare sector. Last October, PAG bought a controlling interest in Anjan Drug, a Chennai-based manufacturer of active pharmaceutical ingredients (API) for a reported sum of $70-80 million.
Founded in 2005, Acme serves major Indian and global pharmaceutical companies, exporting to more than 40 countries. It focuses on sterile injectables, hormones, and other complex oral solid formulations. The company is a leading producer of thyroid treatment Levothyroxine and female reproductive healthcare products
Acme owns a US Food & Drug Administration (FDA)-approved sterile injectables facility in Himachal Pradesh and employs more than 2,300 people through various subsidiaries.
Viral Shah, the company’s founder, will retain a significant minority stake in the business and continue in his existing role as CEO.
“Acme has a great reputation for high-quality manufacturing, as well as a leading presence in attractive markets including sterile injectables. We are excited to partner with Acme’s inspiring founder Viral to further accelerate the company’s growth,” said Nikhil Srivastava, a partner and head of India private equity at PAG, said in a statement.
PAG is currently investing its third pan-Asian buyout fund, which closed on $6 billion in late 2018.
Private equity investment in India’s healthcare sector has accelerated in the past couple of years, driven by more activity in the active pharmaceutical ingredients (APIs) and formulations space. Much of the confidence has been attributed to the FDA setting up an Indian office in 2008 and diving deeper into compliance issues.
India now has the most FDA-approved drug factories outside the US, and it has become the world’s largest exporter of formulations and the top supplier to the US. However, APIs are expected to attract most of the investment as China’s export dominance in this area is chipped away by the shuttering of polluting plants and global pharmaceutical companies diversify their supply chains.
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