ICICI Ventures buys stake in Radiant Research

ICICI Venture has acquired majority control in US-based clinical research company Radiant Research for an undisclosed amount, as reported by Economic Times.

Last year Radiant Research had sold a part of its clinical research business, constituting eight clinical pharmacology centres, to US-based clinical research company Covance for $65 million. With 26 other clinical centres, the current deal could have been valued at $150 million plus.

Apart from clinical centres, Radiant compromises of a full service CRO and a centralised patient recruitment company, employing over 400 clinical research professionals. Radiant Research had clocked revenues of $73.5 million in 2003.

ICICI Venture has multiple exposure in the life sciences business. Its investment portfolio includes Arch Pharmalabs, Malladi Drugs, Bharat Biotech, I-Ven Pharma, RFCL, Metropolis, Perlecan, Avesthagen, Biocon, Medicorp and Intas Pharma.

Wockhardt will pay $265 million (Rs 1,090 crore) in cash to acquire Negma Laboratories

Wockhardt will pay $265 million (Rs 1,090 crore) in cash to acquire a research-based French pharmaceutical company,Negma Laboratories. This means a valuation of 1.8 times the sales and 9.7 times the EBIDTA. While the valuation seems reasonable, if measured against revenues, it is relatively high when one looks at the EBIDTA multiple. Wockhardt will fund the acquisition through internal accruals and debt; it has about $250 million on its books as cash. But more importantly, the acquisition gives Wockhardt a portfolio of patented products.
The management expects the takeover to reflect in its performance from the third quarter. Indian pharma companies are vying for a global presence in the branded generic drug space. Dr Reddy’s had recently acquired German generic drug maker Betapharm.
Earlier, Wockhardt acquired companies in the UK (Wallis and CP Pharmaceuticals), Germany (Esparma) and Ireland (Pinewood Labs). With this acquisition in France, the company effectively covers the whole of Europe. This acquisition helps the company get a strong foothold in the French generic market, which is valued at about $2 billion.
With this acquisition, the management has raised its estimate of group turnover by $90 million to $590 million for FY07. The European business will account for more than 60% of total revenues. The key concern, however, could be the acquisition’s impact on margins. Margins could get hit by about 100 basis points during the current year, as Negma recorded an EBIDTA margin of about 18% last year.

Ranbaxy considers acquisitions in US

Ranbaxy Laboratories Ltd, India's biggest drugmaker, considers acquisitions aimed at expanding operations in the US, south and central America and its home market to be priorities.
Ranbaxy made eight acquisitions last year, buying South African company Be-Tabs Pharmaceuticals and Romania's Terapia. The US $3.4 billion company has been built over the past three decades by copying blockbuster drugs such as Bayer AG's Cipro and selling them for a fraction of the price in countries including France, Germany and the US.

Zydus acquires Tokyo-based Nippon Universal

Cadila Healthcare today announced the acquisition of 100% stake in Tokyo-based Nippon Universal Pharmaceutical.

According to a release issued by Zydus to the BSE today, Nippon reaches out to more than 4,000 hospitals and clinics, and is expected to provide a fillip to the group's operations in a market that is highly complex and dominated by local pharma Companies.

Pankaj R Patel, chairman and managing director, Zydus, said: "We had announced our intentions of being a long-term player in this market when we set up our subsidiary last year. Going forward, I believe this acquisition will unlock value for us as the generic market in Japan is just opening up, and post-2010 we expect this market to be a major growth driver for our global business."

Read the article in Business Standard.

US-based PE firm Jacob Ballas invests $10 mn in biotech firm Avesthagen

US-based private equity firm Jacob Ballas Capital is close to buying a minority stake in Bangalore-based biotech firm Avestha Gengraine Technologies, popularly known as Avesthagen, for about $10 mn. Jacob Ballas’ $10 mn investment will be $5 mn in equity and $5 mn in warrants. The deal is being structured at Rs. 1850 per share, and values the company at $124 mn.

Jacob Ballas is an India-focused private equity firm floated by New York Life Investment Management, a wholly-owned subsidiary of New York Life Insurance Company, Singapore-based Excelfin, Indo-Pacific Estates and India’s construction-engineering firm Punj Lloyd.

Avesthagen had recently raised $32 mn from Fidelity Investments and France-based biotech majors BioMerieux and Limagrain and the food giant Danone. The company has also raised $5-7 mn from Indian corporates such as the Godrej, Cipla, the Tata Group, and ICICI Ventures. ICICI Ventures and Fidelity hold 19% and 10% stake, respectively, in the company while other strategic investors hold 4-6% stake.

Avesthagen is into biopharmaceuticals, bio-nutritionals and bio-agriculture, and also has a portfolio of heath foods, including biscuits and breakfast cereals. Jacob Ballas’ fund infusion will be used for the company’s proposed acquisitions and patent filings. Avesthagen is in the process of acquiring two domestic seed companies to deploy technology that it has developed in the agri-biotechnology business and is in talks with at least five Indian seed companies for possible acquisitions. The capital expansion is also being done to set up manufacturing facilities to upscale production, before moving into phase two of research and development.

Read The Economic Times article.
Related Post:
Avesthagen sells 20% stake for €25 mn

Standard Chartered may buy stake in sick pharmaco Morepen

A Standard Chartered Bank investment arm may acquire stake in the ailing pharma company Morepen Labs, after New York-based and Asia-focused private equity fund Avenue Asia walked out of the deal last week. As per the latest debt restructuring plan, Standard Chartered and the key promoter of Morepen, Sushil Suri, will infuse Rs. 100 crores each in a bid to revive the company. Avenue Asia had earlier committed to invest Rs. 150 crores in the company, before they walked out of the deal.

The company has informed the stock exchanges that it would issue 24.4 mn equity shares and 53.6 mn warrants. These warrants will be issued to the new investor and the promoter; both will have the rights to subscribe to the equity of the company. However, the company has not officially announced the new investor. The warrants will be issued at Rs. 20 per share.

Read The Economic Times article.

Global Hospitals buys Chennai-based Sankara Hospital for Rs. 257 crores

Hyderabad-based Global Hospitals, part of Ravindranath GE Medical Associates, has acquired Sri Kanchi Kamakoti Sankara Hospital (formerly Tamilnad Hospital) in an all-cash deal, for Rs. 257 crores. The amount would be paid in tranches. The Chennai-based Sankara Hospital is spread over 46 acres and has 450 beds.

In July 2006, a division bench of the Madras High Court had permitted the Sri Kanchi Kamakoti Peetam Charitable Trust to sell the Sankara Hospital. The trust, in its application to sell the hospital, said it could not run it and had become heavily indebted. Subsequently, corporates and healthcare majors, including the Murugappa Group, Satya Sai Hospitals of Chennai, Bangalore-based Shriram Properties, Kolkata-based Advanced Medical and Research Institute and Global Hospitals bid for the property. Global emerged winner by quoting Rs. 257 crores and assured that it would run the existing hospital, retain the employees and provide 50 free beds.

Global Hospitals plans to transform the Sankara Hospital into a ‘Health City’ by incorporating facilities like liver, kidney and a multi-organ transplant institute, a heart and lung institute, neurosciences, trauma, orthopedic and cancer institutes and providing alternative therapy in the next 5-10 years at an investment of around Rs. 750 crores. The acquirer also plans to construct service apartments, and subsequently, also increase the number of beds to 1000.

Read more in the Business Standard article.

Ahmedabad-based CRO Synchron acquires local firm Innovance

DNA Money reports that Ahmedabad-based contract research organization (CRO) Synchron Research Services Private Limited has taken over Innovance, a local start-up CRO. The financial details of the transaction, which was facilitated by Deloitte, have not been disclosed. The acquisition is touted as a first-of-its-kind in the Indian CRO space.

Innovance has been co-promoted by Dr. BB Lohray, the former head of research at Zydus Cadila who was in the headlines recently for being fired by the company for alleged embezzlement of funds. The promoters of Innovance wanted to sell off the firm and had approached Synchron 4-5 months ago.

The deal will help Synchron hike its bed capacity to nearly 200 from the 90 and catapult it to the league of Asia’s largest CROs. However, the company is not planning a halt in its inorganic growth strategy anytime soon. It is looking for more acquisitions in India and even in other parts of Asia to increase its Asian footprint, as per company officials.

Glenmark acquires 90% stake in Czech firm Medicamenta

The Economic Times reports that domestic pharma company Glenmark Pharmaceuticals has acquired a majority stake in Czech firm Medicamenta through its wholly-owned Swiss subsidiary, Glenmark Holdings SA. As per the Czech Law, a holding of more than 90% shares in a company would trigger a mandatory takeover bid for the remaining shares. Glenmark will acquire more than 90% in Medicamenta. The financial details of the deal have not been disclosed.

Mumbai-headquartered Glenmark employs 400 scientists and 4000 staff. It sells its products in over 80 countries worldwide and had recorded revenues of $250 mn in the last fiscal year. Medicamenta's projected revenues for 2007 are about $8 mn. The Czech firm has 60 employees and manufactures 29 solid and semi-solid formulations.

Torrent in association with Fortress Investment Group and Greater Pacific Capital for Merck bid

The partners of Torrent Pharmaceuticals, in its bid to acquire Merck’s generics business unit, have come to light. New York-based private equity and hedge fund manager Fortress Investment Group and London-based private equity player Greater Pacific Capital, in association with Torrent Pharma, are close to bagging the over $2 bn-worth global generics business of Merck. This consortium and Israeli pharma company Teva may be the only two left in the fray with the other two global pharma majors Mylan and Actavis having dropped out of the race.

Fortress Investment Group has $30 bn in assets under management. This New York-headquartered group is largely into the businesses of private equity and hedge funds management. The private equity business of Fortress Investment Group manages approximately $17.5 bn of assets under management.

The other private equity firm, Greater Pacific Capital based at London, is a much smaller player with under $1 bn assets under management currently. Greater Pacific’s CEO and founder partner is Ketan Patel who was previously a managing director in the investment banking division at Goldman Sachs, where he founded the Goldman Sachs Strategic Group, a think tank at Goldman Sachs. Greater Pacific Capital invests primarily in equity or equity-related securities in public and private companies in India and China.

If this deal were to come through, it would be one of the biggest by an Indian company in the pharmaceutical sector. Torrent Pharma will have a minority stake while a big chunk of the funding will be done by Fortress Capital. If this consortium wins the bid then Torrent Pharma will manage the entire generics business, while the private equity players will be financial investors.

Read The Economic Times article.

Trinity Capital makes another pre-IPO investment in Fortis Healthcare for Rs. 87 crores

UK-based private equity fund Trinity Capital has increased its stake in Ranbaxy group-promoted Fortis Healthcare Limited to 4% from 1%, through an additional investment of Rs. 87 crores in 6 mn equity shares of Fortis Healthcare. Earlier, in January 2007, Trinity had made an initial investment of Rs. 28 crores for 2 mn equity shares of Fortis Healthcare. The private placements have been in the run up to the initial public offer, to be announced by Fortis Healthcare, during the first quarter of the financial year 2007-08.

Fortis Healthcare currently has a network of 11 hospitals, primarily in North India, and 16 satellite and heart command centers (including one heart command center in Afghanistan). The hospitals include multi specialty hospitals as well as super-specialty centers, providing tertiary and quaternary healthcare to patients in areas such as cardiac care, orthopedics, neurosciences, oncology, renal care, gastroenterology and mother and child care.

The book running lead managers to the issue are JM Morgan Stanley, Citigroup Global Markets and Kotak Mahindra Capital.

Read the article in Business Standard.

Torrent Pharma bids $5-6 bn for Merck's generics business; Ranbaxy pulls out

Two surprising developments have taken place with the Merck deal. Ahmedabad-based Torrent Pharmaceuticals has reportedly emerged as one of the aggressive bidders for German pharma major Merck’s generics business. Torrent has valued Merck Generics at a whopping $5-6 bn. Torrent has made the bid with the help of private equity funds. With this, Torrent joins the league of global pharma giants like Teva, Mylan Laboratories, Novartis and Actavis who are in vying for Merck's generics business. At the home turf, it is pitted against pharma companies Cipla and Ranbaxy.

Also, it has been learnt that Ranbaxy is pulling out of Merck bid on account of concerns of over-valuation. Ranbaxy was being advised by Goldman Sachs and Citigroup on the deal.

Opto Circuits to buy European medical equipment firm for around €16 mn

Bangalore-based Opto Circuits India Limited is planning to acquire a medical devices company in Western Europe. The name of the company has not been disclosed. The deal, estimated to be around €16 mn, is likely to be an all-cash deal and would most likely be concluded early in the next financial year.

The European company manufactures a wide range of balloon catheters assemblies and related products for coronary and other applications. Opto Circuits has a presence in the non-invasive medical devices segment.

In January 2006, Opto Circuits acquired Germany’s EuroCor GmbH for Rs. 60 crores. EuroCor designs and manufactures stents.

Read more in the DNA Money article.

Zydus Cadila acquires Liva Healthcare

Ahmedabad-based pharma company Zydus Cadila has acquired a 97.5% stake in Liva Healthcare in an all-cash deal. The acquisition will be funded through cash accruals and debt.

Zydus expects the acquisition of Liva Healthcare will help the former to establish its presence in the Rs. 1500 crores derma segment, seventh largest therapeutic segment in the Indian pharma market. The market for dermatology products has grown at a CAGR of 14.1% over the last three years.

Zydus’ domestic formulations business contributes to over 50% of the group's turnover with as many as 17 brands amongst the top 300 pharma brands in India. In the participated segments, the group is a leader in the cardiovascular, gastro-intestinal, women's healthcare segments and has a strong presence in the respiratory, pain management and anti-infective segments.

Liva Healthcare is growing at more than 15%. It is a profit making company and it is likely to post sales in excess of Rs. 37 crores in 2006-07. Zydus Cadila has a turnover of Rs. 1800 crores. In the past, the group acquired Recon Healthcare, German Remedies, Banyan Chemicals and Alpharma France.

Read the article in Business Standard.

Sun Pharma to hive off R&D work into new company SPARC

Sun Pharmaceuticals will spin off its research and development (R&D) activities into a new company called Sun Pharma Advanced Research Company (SPARC). The transfer will include the company’s New Chemical Entity (NCE) and New Drug Delivery System (NDDS) programmes, which have an estimated 100 scientists.

Sun Pharma will infuse $45 mn into the new company, to enable it to sustain its operations until revenues from out-licensing deal start flowing in. The company could be looking at raising funds for its new company through equity or debt. It is planning to invest $60 to $65 mn in the new research company in the next three years. Research for generic drugs will remain with the main company.

The de-merger will offer investors an option to separately hold investments in businesses with different return characteristics, depending on their risk and return expectations. The new research company, SPARC, is being valued at more than $450 mn. Simultaneously, the de-merger of Sun Pharma’s innovative R&D business could significantly de-risk the company’s core business.

Read the article in The Economic Times.

PE firms may not support Ranbaxy’s bid for Merck’s generics business

In a major setback to Ranbaxy Laboratories’ bid attempt for Merck’s generics business unit, private equity firms have stated that they do not want fund Ranbaxy's offer as the Indian drug maker does not want to give them an equity stake. Ranbaxy may offer equity only in a special purpose vehicle rather than in itself if it wins the bid. First round non-binding offers for the business, which is expected to fetch at least €4 bn ($5.2 bn), are due by Monday. Iceland's Actavis and Ranbaxy have both said they want to acquire the business.

Meanwhile, the other Indian pharma companies in the race for the Merck bid, Dr. Reddy’s and Cipla, have opted out. Several global majors like Novartis, Teva, Actavis and private equity group Carlyle are said to be interested in the bidding.

Article in Reuters.com and DNA Money.
Related Posts:
Ranbaxy Laboratories to bid for Merck's generic drug business
Ranbaxy Labs to set up SPV for Merck Generics bid

Bangalore-based Teleradiology forms JV with NHG Singapore

Bangalore-based teleradiology services company Teleradiology Solutions has entered a joint venture (JV) with the Singapore-based National Healthcare Group (NHG).

The joint venture company is called Tele Rad, Singapore. It will be based in Singapore and will operate in Asia initially and later spread to other markets. Both companies will invest Singapore $100,000 each. Tele Rad will market the products globally and source work to India. At present, NHG Singapore has nine polyclinics, four hospitals, one national centre and three specialty institutes. Singapore has a Free Trade Agreement (FTA) with the US, and handles hospital needs of the US servicemen both retired and those who are posted in Asia.

For the last three years, Teleradiology Solutions has been servicing NHG Singapore, through a service contract. As part of the contract, 45% of all primary healthcare records totaling 35,000 radiology scans are sent to Bangalore for reading.

For the uninitiated, teleradiology is the remote interpretation of all non-invasive imaging studies such as CT, MRI, ultrasound medicine studies and digitized X-rays.

Read the Business Standard article.

Raksha TPA and UAE-based business group form healthcare JV

Haryana-based Raksha TPA, India’s third-largest health insurance claims administrator, has set up a joint venture with UAE-based industrial conglomerate Rais Hassan Sadi in Dubai. Rais Hasan Sadi is a 92-year old business group with interests ranging from shipping to real estate. The JV, to be called as RHS-Raksha TPA, with Raksha holding 49% and RHS holding the balance, will seek to direct patients needing tertiary healthcare to hospitals in India. Tertiary healthcare is specialized medical services that include cancer care, neurosurgery and burns care.

Initially, RHS-Raksha will empanel hospitals in Abu Dhabi and Sharjah and later Oman for cashless treatment of health insurance policyholders. For tertiary care cases, the JV will consider sending patients to Raksha’s network of hospitals in India.

Ritu Nanda, chairperson and CEO of RNIS College of Insurance, and Rajan Nanda of Escorts together hold 60% stake in Raksha TPA and the other 40% is held by Naresh Trehan, executive director of Escorts Heart Institute.

Read the Business Standard article.

Temasek sells stake in Apollo Hospitals for Rs. 134 crores

Singapore government's investment company Temasek Holdings has sold its entire holding of 5.26% stake in healthcare major Apollo Hospitals Enterprise for Rs. 133.68 crores. The stakes were held by two investment firms Maxwell Mauritius and Aranda Investments.

Maxwell Mauritius sold 2.079 mn shares, while Aranda Investments sold 640,000 shares for Rs. 491.50 each in a bulk deal in the open markets. Aranda Investments’ holding represented a 1.24% stake while that of Maxwell Mauritius represented 4.03% in the Chennai-based healthcare group.

Meanwhile, another fund house Fid Funds Mauritius of Fidelity Investments bought 2.94 mn shares (5.7%) of Apollo for around Rs. 144.62 crores at the same price Temasek's units sold their stakes. Fidelity Select Portfolios Medical Delivery Portfolio already holds 723,000 shares representing a 1.4% stake in Apollo Hospitals.

Article in Business Standard.

Apollo Hospitals has UK-based Abbey Hospitals on its radar

Indian healthcare major Apollo Hospitals may bid for Abbey Hospitals, a UK-based hospital chain. Abbey Hospitals has been put up for sale by its parent company, the British healthcare group Covenant. It operates a chain of six hospitals. Any sale would happen at an estimated deal size of $100-150 mn. JP Morgan’s private equity arm, One Equity Capital is likely to partner Apollo Hospitals in the buyout. The fund already has investments in the Apollo Group companies.

Covenant Group is controlled by the Cognetes Fund. Cognetes acquired Covenant from Phoenix Private Equity for about $170 mn in 2005. Capio, the other identified target is also controlled by private equity funds Apax Partners and Nordic Capital. Deloitte is managing the sale process of Abbey and is expected to kick off the procedure in the next few weeks.

Read The Economic Times article.