- The $490 million (Rs 3,700 crore) deal likely to be closed in 2020.
- Deal based on Piramal Pharma's enterprise value of $2,775 million
- Piramal is one of the leading global contract manufacturers for big pharma with 13 global facilities
- The business includes contract manufacturing, critical care, OTC and JVs, with revenues of Rs 5,419 crore in FY20
In one of the largest private equity deals in the Indian pharmaceutical sector, the US-based Carlyle has picked up a 20% stake in Piramal Enterprises subsidiary Piramal Pharma for US$490 million or nearly Rs 3,700 crore.
The transaction values Piramal's pharma business at an enterprise value (EV) of US$2,775 million, with an upside component of up to US$360 million depending on the company's FY21 performance. The final amount of equity investment will depend on the net debt, exchange rate and performance against the pre-agreed conditions at the time of closing of the deal, expected to close in 2020, said Ajay Piramal, Chairman Piramal Group.
PEL's pharma revenue had a compounded annual growth rate (CAGR) of 15% from Rs 1,537 crore in FY11 to Rs 5,419 crore in FY20. PEL's pharma revenue rose 3.5 times since the sale of formulation division to Abbott in 2010 for $3.8 billion. Piramal is one of the leading global contract manufacturers for big pharma with 13 global facilities and a large global distribution network to over 100 countries.
"In pharma, there are many opportunities globally in organic and inorganic route and partnering with a marquee investor like Carlyle reflects the quality and value of our business," Ajay Piramal said today in a digital press conference. He said the funds from this deal will further strengthen the balance sheet of Piramal Enterprise and will provide a war chest for the next phase of growth strategy.
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.