TII, Premji to acquire India medical devices player
Tube Investments of India (TII) and Premji Invest have agreed to acquire medical instruments maker Lotus Surgicals for up to INR 3.5bn (USD 42.3m), providing an exit for Samara Capital.
TII is an engineering investment unit of industrials conglomerate Murugappa Group. Premji Invest is the family office of Wipro Group chairman Azim Premji. TII will invest up to about INR 2.3bn for a 67% stake, while Premji will commit up to INR 1.1bn for a 33% position via its PI Opportunities Fund.
This is TII’s first investment in medical technology. Premji has experience across biotech, pharmacies, and clinics, including specialised cancer clinics.
The deal is touted as the first step for TII and Premji in initiating a platform partnership that will focus on the production of innovative medical products at affordable price points. The platform, which will scale both organically and through M&A, is said to be inspired by the government’s “Atmanirbhar Bharat” agenda to create a self-reliant India in industries such as manufacturing.
“Our deep expertise in establishing and managing large-scale manufacturing, coupled with Premji Invest’s strong domain knowledge and investing experience will enable Lotus to tap the immense potential in the med-tech business,” Arun Murugappan, executive chairman of TII, said in a statement.
Samara acquired Lotus in 2013, taking a stake of undisclosed size for INR 1.5bn. An unspecified number of other unnamed investors are also exiting. The transaction is expected to close by the end of April.
Lotus was founded in 2005 to produce a range of sutures, surgical meshes, skin staplers, medical tapes, prostheses, and sling systems, among other instruments. Revenue came to INR 1.2bn in financial 2022, up from INR 840m the prior year.
Medical devices have steadily declined as an investment destination in recent years due to industry consolidation and increasing complications around regulatory hurdles, and commercialisation processes.
Specialist investors have continued to find value, however, in the potential to serve massive markets with relatively underdeveloped innovation ecosystems.
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