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Piramal Enterprises Ltd (PEL) will sell its healthcare insights and analytics firm to US-based Clarivate Analytics for $950 million. This includes $900 million on closing and $50 million to be received at the end of 12 months from the date of closing.
PEL had initially invested $650 million in 2012 to acquire the analytics company, called Decision Resources Group (DRG), out of which $260 million was infused as equity. Piramal has been operating DRG Dutch HoldCo BV, the holding company for DRG, as its wholly-owned subsidiary since then.
The sale is subject to shareholder approval and is expected to be completed by February-end.
Ajay Piramal, Chairman, Piramal Group, said: “Along with the ongoing equity capital raise in PEL, this transaction not only further strengthens the company’s balance sheet but also marks another step towards significantly unlocking value.”
On Friday, PEL also announced that it has paid a principal amount of ₹238 crore for the non-convertible bonds issued by the company in 2018.
PEL shares were up 5 per cent and closed at ₹1,627 a unit on Friday on the BSE.
Paring short-term debt
Over the last year, the company has raised long-term capital of ₹24,000 crore to pare short-term liability and adjust the mismatch. In December, PEL had raised ₹1,750 crore from Caisse de dépôt et Placement du Québec (CDPQ) through a preferential allotment. PEL had in October announced its plans to raise fresh capital of ₹5,400 crore through a rights issue and preferential allotment of compulsorily convertible debentures.
While the deal with Clarivate will bring in more funds for Piramal, it will help DRG further accelerate its growth potential. The revenue from the healthcare insights and analytics business was ₹1,330.74 crore for the financial year ended March 31, 2019.
Vivek Sharma, CEO, DRG, said: “I am excited at this acquisition as it creates an even more powerful platform for DRG’s AI and analytics-enabled solutions to support our customers in their quest to improve patient health outcomes.”
DRG specialises in enabling pharma, biotech and medical technology companies to achieve commercial success in complex health markets with the creation of effective patient-centric commercial strategies.
With this deal, Piramal has realised 2.3x its initial equity investment in rupee terms.
Earlier, Ajay Piramal realised a huge premium when he sold his stake in Vodafone India in 2014 and exited the pharmaceutical business through a deal with Abbott in 2010.
Unlocking value
Decision Resources Group specialises in enabling pharma, biotech and medical technology companies to achieve commercial success in health markets
The deal will help DRG further accelerate its growth potential
The sale is expected to be completed by February-end
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