Markets

Piramal Pharma completes 20% stake sale to Carlyle

Mumbai | Updated on October 06, 2020

Receives ₹3,523.40 cr from investment firm

Piramal Pharma Ltd (PPL) has received ₹3,523.40 crore on closure of transaction to divest 20 per cent equity in the company to global investment firm The Carlyle Group Inc.

The transaction values the pharmaceutical business at an enterprise value of $2,775 million with an upside component of up to $360 million, depending on the company’s FY21 performance.

Piramal Pharma, a subsidiary of Piramal Enterprises Ltd (PEL) now holds Piramal Pharma Solutions (contract development and manufacturing business), Piramal Critical Care (hospital generics business selling specialised products), consumer products division (into consumer healthcare and selling over-the-counter products in India), PEL’s investment in the joint venture with Allergan India (ophthalmology in the domestic market) and Convergence Chemicals Pvt Ltd.

Nandini Piramal, Executive Director, Piramal Enterprises, said the completion of the transaction would pave the way for enhanced opportunities ahead, including leveraging Carlyle’s expertise and global strengths to bolster growth.

When the deal was announced about three months ago, PEL Chairman Ajay Piramal had indicated that the pharma business would be listed in the “near future”. It accounts for about 40 per cent of PEL’s total business. Debt on the pharma side stood at an estimated ₹4,200 crore, management representatives had said then, adding that it was expected to be at ₹2,500 crore by FY21, without taking the acquisitions into account.

This investment will be used as growth capital for the pharma businesses to expand capacity across PPL’s sites as well as to tap attractive acquisition opportunities within and outside India, the company said. In the interim, proceeds from the capital would also help strengthen the company’s balance sheet, it added.

Published on October 06, 2020

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