The Competition Commission of India (CCI) has given its approval for the acquisition of 20 per cent stake in Ajay Piramal-led Piramal Pharma by the US-based global investment firm Carlyle group. This is one of the largest private equity deals in the Indian pharmaceutical sector.
Piramal group, in a regulatory filing in June, had said Carlyle picked up a 20 per cent stake in Piramal Enterprises subsidiary Piramal Pharma for $490 million or nearly Rs 3,700 crore.
The transaction valued Piramal's pharma business at an enterprise value (EV) of $2,775 million, with an upside component of up to $360 million depending on the company's FY21 performance.
Company Chairman Ajay Piramal had said the final amount of equity investment would depend on the net debt, exchange rate and performance against the pre-agreed conditions at the time of closing of the deal. The deal is expected to close by December 2020, subject to customary closing conditions and regulatory approvals.
PEL's pharma revenue had a compounded annual growth rate (CAGR) of 15 per cent from Rs 1,537 crore in FY11 to Rs 5,419 crore in FY20. Despite the COVID-19 pandemic impact, the company delivered revenues worth Rs 1,038 crore, around 90 per cent of Q1FY20.
Piramal's pharma business includes contract development and manufacturing (CDMO) business, complex and specialised critical care hospital products across over 100 countries, consumer healthcare business and a joint venture with Allergan India, a leader in ophthalmology in the domestic market and convergence chemicals.