Zydus to sell animal healthcare business to Zenex for ₹2,921 crore

Our Bureau Ahmedabad | Updated on July 02, 2021

Inks agreement to sell businesses in India and some other countries by way of a slump sale


Cadila Healthcare Limited (Zydus Cadila) on Wednesday said its wholly-owned Zydus Animal Health and Investment Limited (ZAHL) has entered into a Business Transfer Agreement with Zenex Animal Health India Private Limited to sell itsanimal healthcare business.

Zydus will sell the Animal Healthcare Established Markets Undertaking - the animal healthcare business in India and certain other countries - by way of a slump sale- for an estimated consideration amount of ₹2,921 crore, subject to certain closing date adjustments in terms of the Definitive Agreements, the company said in a regulatory filing.

Zydus further informed that ZAHL will continue to pursue business opportunities in US and certain European countries through Animal Healthcare Emerging Markets Undertaking, which is not part of the transaction. "ZAHL continues to develop the animal health business products for those markets and at present, this business is in the development and investment phase," a statement said.

For the financial year 2019-20, the Animal Healthcare Established Markets Undertaking had reported a turnover of ₹513 crore representing 4 per cent of the consolidated turnover and EBIDTA of ₹87.6 crore representing 3 per cent of the consolidated EBIDTA of the parent, Cadila Healthcare Limited. The net worth of the unit was placed at ₹2,203.6 crore as on March 31, 2020, which represents 21 per cent of the consolidated net worth of the parent company.

The completion of the sale is expected within a period of 90 days and is subject to approval of shareholders of the Company by way of a special resolution.

Formerly Nutrizvit Animal Health India, Zenex Animal Health India is a special purpose vehicle incorporated by Multiples Alternate Asset Management Private Limited and other investors with an objective to carry on animal healthcare business. There is no related party transaction involved, the filing said.

ZAHL informed that it had initiated the process to look for strategic and/or financial partners with an intention to invite them to take equity stake in ZAHL. "During the process, ZAHL realized that the preference of the investors was to get majority or total and absolute control of the business of its Animal Healthcare Established Markets Undertaking (rather than becoming a significant minority partner in ZAHL). In view of the foregoing, ZAHL found it commercially prudent to transfer the Undertaking to the Purchaser," it said.

Cadila Healthcare shares gained over 3 per cent to trade at ₹650 in the morning trades on BSE on Wednesday.

Published on May 12, 2021

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