KKR to invest $200m in Indian drug maker Gland Pharma
KKR has agreed to buy a minority stake in Gland Pharma, an Indian injectable drugs manufacturer, for approximately $200 million. The investment facilitates the exit of Invascent Capital's Evolvence India Life Sciences Fund (EILSF).
The size of the stake was not disclosed, but sources familiar with the transaction put it at between 35% and 40%. The deal will be structured in two parts: an infusion of fresh equity followed by the purchase of EILSF's interest in the company. Indian regulatory approvals are required for it to go through.
"Gland Pharma has a track record of strong financial performance as well as long-standing relationships with Indian and international pharmaceutical companies and we believe there is significant potential for it to grow these partnerships even further," said Sanjay Nayar, CEO of KKR India.
"We are excited to invest behind a high-quality promoter family and management team led by Dr. Ravi [Penmetsa]."
Established in 1978 and based in Hyderabad, Gland develops and produces active pharmaceutical ingredients (APIs) and injectable formulations for niche segments including osteoarthritis, anti-coagulants, gynecology and ophthalmology. It primarily sells into the US market but has an increasing presence domestically and in other semi-regulated markets.
In 2003, Gland became the first Indian company to get US Food and Drug Administration approval for pharmaceutical liquid injectable products. The company also pioneered pre-filled syringe technology and Heparin technology in India and subsequently built a position in the US market, through exports and a local marketing partner, respectively.
KKR is expected to help the company grow its manufacturing capacity and invest in development work with a view to expanding product registrations.
Gland has a partnership with Germany's Vetter Pharma, a global leader in pre-filled syringe technology, and the Vetter family is an investor in the company. According to AVCJ Research, EILSF - a 2007 vintage $90 million vehicle - committed $30 million to Gland in 2008.
This is the fourth announced investment from KKR's second pan-Asia fund, which closed earlier this year at $6 billion, and the ninth the PE firm has agreed in 2013. These deals include the purchase of Warburg Pincus' controlling stake in Indian tire maker Alliance Tire Group, which was the final investment from KKR Asian Fund I.
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