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news.Taisho Pharma has emerged as the front-runner to acquire a majority stake in India-based health and personal care company Paras Pharmaceuticals.
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Morgan Stanley and private equity investors Actis Advisors and Sequoia Capital India Advisors, which jointly own 70% in Paras Pharma, are also said to be in the race.
The Japanese pharma firm has offered more than six times Paras’ estimated revenues of INR5 to 5.5bn, the Economic Times reported.
Ahmedabad-based Paras Pharma owns brands in niche segments such as pain-relieving ointment Moov, anti-cold and cough medicine D’Cold besides prickly heat powder Dermicool.
Taisho, which employs over 5,500 internationally and had revenues of $3.1bn for the year ended March 2010, currently has no presence in India.
A buyout will give the Japanese over-the-counter (OTC) products maker an entry into many segments where Paras has presence in India. Besides, Taisho, which has presence in the US, the UK, China, Malaysia and some other Asian nations, can also sell the Indian drugmaker’s products in other markets.
The Economic Times has quoted Everstone Capital managing partner Sameer Sain as saying that now the country is beginning to see home-grown companies create brand and scale up business. Since there are very few such local companies, global MNCs not present in India may pay a high premium to buy companies like Paras.