Carlyle Group leads race for 15 per cent in Mankind Pharmaceuticals

MUMBAI: Carlyle Group is leading the race to invest as much as $500 million for a 15% stake in Mankind Pharmaceuticals in what could become one of the largest private equity transactions in the pharma space. The transaction, if it happens, will value the Delhi-based company at about $3.3 billion.

Another US fund, Advent International, and British private equity firm Apax Partners are the other two contenders. Final due diligence is going on, multiple sources close to the deal told ET.

“The final due diligence is on and the deal negotiations are at an advanced stage. We expect to conclude a transaction by the first quarter of next fiscal,” said one of the sources mentioned above.


Moelis & Co is running a formal process to find a buyer, sources said. Carlyle, Advent and Apax declined to comment. An email sent to Mankind remained unanswered till the time of going to press. Founded in 1995 by Ramesh Juneja and Rajeev Juneja, Mankind Pharma has a heavy focus on semi-urban and rural markets.

The company, which is the maker of leading brands such as Manforce condoms, PregaNews and Unwanted 72, has presence in about 22 countries across Southeast Asia, Africa and the Middle East, according to the company’s website.

IPO Plans
It employs over 14,000 people and reported a revenue of Rs 4,400 crore in FY17 with an operating profit of Rs950 crore. The Juneja family controls 89% while private equity firm Capital International bought 11% in the company last year from domestic investor ChrysCapital. A section of the promoter family is exiting this time around through a secondary sale of shares. The company has been planning an IPO for the last two years and is poised to go public in the next financial year.

Funds such as Carlyle and Apax have been investing in pharmaceutical product companies in India as most of these investments have generated bumper returns. Private equity fund managers earned an average five to 17 times their invested capital in constant currency terms in the past 10 years on pharma and healthcare bets in India, data compiled by Venture Intelligence show.

For eg, ChrysCapital earned 13 times its investment in Mankind, while Actis and Sequoia earned 7 times from Paras Pharma when it was sold to Reckitt Benckiser. Carlyle has invested in Naresh Trehan-owned Global Health, which runs the Medanta Medicity hospital in Delhi and Claris Lifesciences. It has also been negotiating with vaccine-maker Bharat Biotech for a potential transaction. The company has also made a $250-million bet in Metropolis Healthcare.

Apax, which made a successful exit from Apollo Hospitals, has also been an aggressive investor in the tech and healthcare space in India.

The London-headquartered fund is currently working with Zydus Cadilla to evaluate a $2.3-billion acquisition of Sanofi's European generics business. Apax also owns several generic units across Europe.

Advent International also made significant investments in India’s healthcare space. It sold a controlling stake in Hyderabad’s CARE Hospitals to Abraaj Group while it made an unsuccessful attempt to buy Gland Pharma from KKR which was eventually acquired by China’s Fosun.