Private equity majors Warburg Pincus and Kedaara Capital are among investors in the race to acquire Chennai-based medical equipment manufacturer Appasamy Associates, according to people aware of the development. The deal is expected to be over ₹1,500 crore.

According to a source, three investors, including Warburg Pincus and Kedaara Capital, have been looking to acquire a controlling stake in the company. “One of the parties has already signed an exclusivity agreement with the company and will begin the due diligence process,” the source said. 

The source cited above estimates the valuation of the company to be ₹2,200-2,500 crore and added that it has posted a revenue of about ₹550 crore with an EBITDA of about ₹150 crore in FY23. 

Founded in 1978, Appasamy Associates Pvt Ltd and group of companies are into the manufacture and distribution of ophthalmic diagnostic equipment and surgical systems, microscopes, ophthalmic lasers, intraocular lenses, surgical instruments and pharmaceuticals. It has manufacturing facilities in Tamil Nadu, Puducherry, West Bengal and Himachal Pradesh.

Emails sent to Warburg Pincus and Kedaara Capital did not elicit any response till the time of filing the report. Arvind Kasthuri, Executive Director, Appasamy Associates said, as a policy the company does not comment on speculations. 

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According to MarketsandMarkets, the global ophthalmic equipment market is projected to grow from $63.4 billion in 2022 to $80.9 billion by 2027. In a report, the market research firm said Bausch Health Companies, Alcon, Carl Zeiss and Johnson & Johnson are  the prominent players in the ophthalmic equipment market globally, while Appasamy Associates was a prominent player in India. 

If Warburg Pincus emerges as the successful buyer, this will be the second acquisition for the US-based private equity firm in Tamil Nadu in recent times. Last week, Canyon Trail Investments BV, an affiliate of Warburg Pincus, acquired a majority stake in Coimbatore-based Watertec India Pvt Ltd at a valuation of $400 million (around ₹3,000 crore).