The board of directors of TTK Healthcare has has approved a proposal of sale/transfer of the company’s human pharma, as a going concern, on a slump sale basis.

In an exchange filing, the company said, “The board of directors, in their meeting held on March 21, based on the recommendation of the audit committee, approved the proposal.”

Pursuant to this decision, definitive agreements have been concluded with BSV Pharma Private Limited, of which Miransa (an affiliate of Advent International), Bharat Serums and Vaccines Ltd and others are shareholders. Once the transaction is completed, TTK Healthcare will hold 26 per cent stake and others will hold the remaining. 

The total value of the consideration is ₹805 crore, according to the filing, subject to the adjustments for working capital and other customary adjustments as on the date of transfer. “The company will receive 74 per cent of the consideration by way of cash and equity shares for the balance 26 per cent, each immediately on transfer of the undertaking,” TTK Healthcare said.

The FY21 revenue/turnover of human pharma division which manufactures medicines for respiratory, infertility, orthopaedic, cardiology and other ailments, was around ₹160 crore (25 per cent of the total turnover of the company).

Subject to shareholder approval

TTK Healthcare Limited has several business divisions such as consumer products, personal products, foods, medical devices, animal welfare products, prescription-based human pharmaceuticals formulations, etc. Its core competence relates to various divisions other than human pharma formulations and the company intends to invest in and expand those businesses. 

“Therefore, the board has decided to hive-off the human pharma division for a consideration that is attractive and use the proceeds in such areas where core competency is present and for the benefit of all stakeholders,” the company said. It also added that the transaction is subject to shareholders’ approval by means of a postal ballot process and fulfillment of ‘conditions precedent’.

Shares of TTK Healthcare hit a 52-week high of ₹969.75 apiece on the BSE on Monday before closing at ₹872.05, 7.90 per cent higher than the previous day’s close.