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Cadila Healthcare share hits 52-week high as firm to sell animal health business

The consortium, including Canada Pension Plan Investment Board and Rakesh Jhunjhunwala-backed RARE Enterprises, has agreed to purchase the Undertaking through an SPV controlled by them, in the name of Zenex Animal Health India Private Limited for Rs 2,921 crore

twitter-logoBusinessToday.In | May 12, 2021 | Updated 18:06 IST
The consortium, including Canada Pension Plan Investment Board and Rakesh Jhunjhunwala-backed RARE Enterprises, has agreed to purchase the Undertaking through an SPV controlled by them, in the name of Zenex Animal Health India Private Limited for Rs 2,921
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Share of Cadila Healthcare rose nearly 7 per cent to hit a 52-week high after the company announced that Zydus Animal Health and Investments Limited (ZAHL), a wholly-owned material subsidiary of Cadila Healthcare Limited, has entered into a Business Transfer Agreement (BTA) and other ancillary agreements to sell and transfer its Animal Healthcare Established Markets Undertaking to Multiples Alternate Asset Management led consortium.

The consortium, including Canada Pension Plan Investment Board and Rakesh Jhunjhunwala-backed RARE Enterprises, has agreed to purchase the Undertaking through an SPV controlled by them, in the name of Zenex Animal Health India Private Limited for Rs 2,921 crore.

The share ended 2.74 per cent higher at Rs 646.95 against the previous close of Rs 629.70 on BSE. Cadila Healthcare share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages.

The stock has gained 99.88 per cent in one year and risen 35.71 per cent since the beginning of this year. Market cap of the firm rose to Rs 66,231.03 crore.

"We are delighted to partner with CPP Investments and Multiples in investing into a market-leading business, in a segment which has huge growth potential and has a top-quality management team," said Mr. Rakesh Jhunjhunwala, Partner, RARE Enterprises.

"Zydus AH is a strong leader in the Indian animal health market with strong brands, comprehensive product portfolio, and extensive distribution network. We are excited to back Zydus AH'stop quality management team led by Dr. Arun Atrey and be able to invest in a business that has been helping farmers enhance their productivity and incomes by delivering innovative animal health solutions," said Ms. Renuka Ramnath, Founder, and CEO, Multiples Alternate Asset Management.

"I expect Multiples to do many such large transactions in the coming years. We are also delighted to partner with CPP Investments and RARE enterprises for our first consortium deal. We look forward to working with them and, help the Company unlock its full potential and create value for all stakeholders" Ramnath added.

"Over the last 3 decades Zydus AH has grown to become a pioneer and market leader in the Indian animal health industry. With Multiples and its consortium partners committed to growing the business, we are sure that Zydus AH will continue to grow and strengthen its position in the industry," said Mr. Pankaj Patel, Chairman, Cadila Healthcare Ltd.

"The Zydus AH business has a very strong franchise in the market and is extremely well positioned to take advantage of the continued industry growth in India and select exports markets. We expect this process to be seamless for our customers, suppliers and other stakeholders, with no disruption to our operations," said Dr. Arun Atrey, Managing Director, ZAHL.

ZAHL has another animal healthcare business undertaking which is expected to commence animal health business in the US and certain European countries and this business undertaking is not part of the transaction.

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