US private equity firm Carlyle Group has agreed to acquire a stake of 20% stake in Piramal Pharma, the pharmaceutical business of Indian conglomerate Piramal Enterprises, in a deal worth up to $490m.
Piramal Pharma comprises four businesses, which includes a contract development and manufacturing (CDMO) business called Piramal Pharma Solutions.
The pharma group also runs a complex hospital generics business that sells specialised products across more than 100 countries under the name Piramal Critical Care.
It operates a consumer healthcare business as well that sells over-the-counter products in India.
Besides, Piramal Pharma holds Piramal Enterprises’ investment in the Allergan India joint venture, which is an ophthalmology-focused firm, and Convergence Chemicals.
Carlyle Asia Partners advisory team managing director Neeraj Bharadwaj said: “Piramal Pharma has built a strong, diversified pharma business with a solid market position and scale in each of its core business segments of Pharma Solutions, Critical Care and Consumer Products.
“Given global pharma industry trends, we see attractive opportunities for organic as well as inorganic growth in each of these businesses.”
The deal values Piramal Enterprises’ pharma business at an enterprise value of $2.77bn with an upside component of up to $360m which will be based on the company’s full-year 2021 performance.
Piramal Enterprises chairman Ajay Piramal said: “We are pleased to announce the strategic growth investment by Carlyle, a marquee global investor, in Piramal Pharma. This is an affirmation of the strength of our ability to build new, attractive and scalable businesses with a significant runway for continued organic growth and opportunities for consolidation.
“This infusion of funds will further strengthen our balance sheet and provide us with a war chest for the next phase of our strategy.”
Carlyle Group said that the final consideration will be based on the net debt, exchange rate, and performance against the pre-agreed conditions at the time of closing of the transaction.
The acquisition is being executed by CA Clover Intermediate II Investments, an affiliated entity of CAP V Mauritius, which is an investment fund managed and advised by affiliated entities of Carlyle Group.
The deal, which is subject to meeting of customary closing conditions and regulatory approvals, is expected to close this year.
In a separate development, Piramal Pharma Solutions has completed its 100% stake acquisition of G&W PA Laboratories for $17.5m to gain ownership of the latter’s solid oral dosage drug product manufacturing facility in Sellersville, Pennsylvania.