Samara Capital buys stake in SMT

As part of the deal, Samara Capital's managing director Gautam Gode and vice president Abhishek Kabra will come on SMT's board.

NEW DELHI: India-focused private equity firm Samara Capital has acquired stake in Gujarat-based stent-maker Sahajanand Medical Technologies (SMT) in a deal valued at close to Rs 170 crore. This is the firm’s second investment in the medical devices and consumables sector after the buyout of surgical consumables platform Lotus Surgicals.

SMT confirmed the development but did not divulge how much stake Samara has acquired in the company. As part of the deal, Samara Capital’s managing director Gautam Gode and vice president Abhishek Kabra will come on SMT’s board.

“We believe that the SMT team has the credibility and experience to build a large and global quality business while providing world-class products at affordable prices,” Gode said.

A majority of the PE firm’s investment is expected to fuel research and development to extend SMT’s product line in cardiovascular segment, SMT’s chief executive Ganesh Sabat said.

SMT seeks to increase its offerings to bioresorbable stents, structural heart disease devices and technology it says Indian manufacturers don’t possess – ninitol-based peripheral stents with shape memory that can mimic the patient’s anatomy. Peripheral stents are implanted in other parts of the body.

Samara Capital’s partnership will also aid SMT's global expansion, especially through acquisitions, to markets such as the US and Japan where it does not have a presence, Sabat said.
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“Samara is well-connected across the world, which will help us increase our market reach. We want to become a global player and they’ve grown so many companies that they would know how to help us scale up, including what pitfalls to avoid,” Sabat told ET.

The stent maker has just begun scouting for companies to acquire and is yet to evaluate whether these acquisitions will happen on the basis of geographical presence of the companies or technological diversification, he said.

At the same time, both partners will be selective about these acquisitions since SMT is already registered in 60 countries, according to Samara Capital vice president Abhishek Kabra. “Selectively, we will look at inorganic opportunities which will fit the portfolio and enable faster growth for the company,” he said.

SMT intends to capture a larger share of the Rs 2,500 crore Indian coronary stent market in the next four years, Sabat said. It has a 12-13% share at present.
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The company also hopes to strengthen its position in the global coronary stent market. In Europe alone, SMT aims to capture 10-12% share of the market in the next five years. The coronary stent market in this region is expected to grow at a compound annual growth rate of 5.6% to $3.3 billion by 2022, according to a recent report by market research firm Research and Markets.

SMT is currently pursuing entry into France, Germany, Belgium and Switzerland by the end of 2017, Sabat said.
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