Baring lines up $150 mn for pharma play

NEW DELHI: Baring Private Equity Partners is in discussions with a few mid-sized privately held pharma companies which could see the PE firm investing up to $150 million (over Rs 675 crore) in the next few months, a Baring executive said.

“We are in fairly advanced talks with 3-4 drug contract manufacturing companies and the deal size of each investment could be $35-50 million. At this time, all the deals look plausible. If talks fructify, the transactions will be closed over the next 3-4 months,” Amit Chander,

head of investments (healthcare & education), Baring Partners told ET.

In India, Baring has a fund size of $550 million to be invested over the next 8-9 years. Healthcare is a focus area for the firm and about 20% of these funds are planned to be deployed in the healthcare space. So far, it has just invested about 15% of the fund which was raised about a year ago, he added. Typically, the firm has an investment period of about 6 years. According to Mr Chander, besides the contract manufacturing space, it is also exploring investments in medical device companies, which focus on developing new unmet segments.

In the past couple of years, the domestic pharma sector has witnessed several acquisitions by global pharma companies. But there has been few notable PE interests in the pharma space even as the overall investment by PE players have picked up momentum from last year.

According to Pankaj Karna, ex-partner and head M&A at Grant Thornton bigger pharma companies are more suitable for acquisitions and PE investments are more likely to be made in the smaller pharma companies who have strong competencies and growth potential in the domestic market.

As per research firm which tracks PE and M&A transactions in the country, 84 PE deals worth $1,392 million were made during the quarter ended December, compared with 72 deals worth $1,215 million in the same period last year.