Blackstone to invest Rs 225cr in Emcure
The big private equity guns have started firing in India. One of the world’s largest PE investors- The Blackstone Group -is set to invest around Rs 225 crore ($50m) in the Pune-based Emcure Pharmaceuticals.
By Javed Sayed & Vinod Mahanta, TNN |
NEW DELHI: The big private equity guns have started firing in India. One of the world’s largest PE investors— The Blackstone Group —is set to invest around Rs 225 crore ($50m) in the Pune-based Emcure Pharmaceuticals. This should be Blackstone’s first major investment in the country, more than 12 months after it commenced operations in India.
When contacted, Blackstone India chairman Akhil Gupta said: ”It is not our policy to comment.’’ Two telephone calls and an e-mail sent to Emcure MD Satish Mehta failed to elicit any response.
The exact equity stake that Blackstone will hold in Emcure could not be ascertained. Different financial investors and PE firms have assigned different valuations to the privately held Emcure, ranging from Rs 650 crore to Rs 1,000 crore.
A valuation of around Rs 900 crore to Rs 1,000 crore would peg Blackstone’s holding in the pharma company at about 25%.
Sources in the private equity industry say that Emcure had been looking for an investor for over a year but there had been differences over valuations.
The company is said to have rejected offers that were based on valuations of around Rs 650 crore to Rs 700 crore. For Blackstone, this will be its first substantial investment in India.
Emcure Pharmaceuticals is a mid rung pharma company with annual revenues of Rs 500 crore plus. Its contract manufacturing and domestic formulations businesses account for about 80% of its total revenues with formulation exports accounting for the remaining 20%. It has begun exports to regulated markets with the completion of its Hinwadi plant. Sources say the company’s export potential and its prospects of tapping the lucrative global generic opportunity is a major reason for Blackstone’s interest in Emcure.
Earlier this year, Emcure Pharmaceuticals entered into a strategic alliance with Bristol-Myers Squibb, as part of the US pharma major’s global access programme. Under the agreement, Emcure would manufacture the bulk drug, finished atazanavir, and also market it in 50 countries in Sub-Sahara, Africa and India. The drug is a protease inhibitor, which is useful in second-line treatments for patients who have developed resistance to their first antiretroviral cocktails.
When contacted, Blackstone India chairman Akhil Gupta said: ”It is not our policy to comment.’’ Two telephone calls and an e-mail sent to Emcure MD Satish Mehta failed to elicit any response.
The exact equity stake that Blackstone will hold in Emcure could not be ascertained. Different financial investors and PE firms have assigned different valuations to the privately held Emcure, ranging from Rs 650 crore to Rs 1,000 crore.
A valuation of around Rs 900 crore to Rs 1,000 crore would peg Blackstone’s holding in the pharma company at about 25%.
Sources in the private equity industry say that Emcure had been looking for an investor for over a year but there had been differences over valuations.
The company is said to have rejected offers that were based on valuations of around Rs 650 crore to Rs 700 crore. For Blackstone, this will be its first substantial investment in India.
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It is believed to have made its debut in India earlier this year by acquiring a 5% stake in the Chennai-based software company SSI Ltd for around Rs 15 crore, small change for a private equity firm which has announced a $500 million dedicated India fund. Blackstone, along with KKR, Texas Pacific Group, and Carlyle, is the big daddy of the global private equity industry. It has raised and manages funds of more than $14 billion globally and has made investments in nearly 100 companies worldwide.Emcure Pharmaceuticals is a mid rung pharma company with annual revenues of Rs 500 crore plus. Its contract manufacturing and domestic formulations businesses account for about 80% of its total revenues with formulation exports accounting for the remaining 20%. It has begun exports to regulated markets with the completion of its Hinwadi plant. Sources say the company’s export potential and its prospects of tapping the lucrative global generic opportunity is a major reason for Blackstone’s interest in Emcure.
Earlier this year, Emcure Pharmaceuticals entered into a strategic alliance with Bristol-Myers Squibb, as part of the US pharma major’s global access programme. Under the agreement, Emcure would manufacture the bulk drug, finished atazanavir, and also market it in 50 countries in Sub-Sahara, Africa and India. The drug is a protease inhibitor, which is useful in second-line treatments for patients who have developed resistance to their first antiretroviral cocktails.
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