THD NewsDesk, NEW DELHI: The Competition Commission of India (CCI) has finally approved the amalgamation of Piramal Pharma Ltd and the Carlyle Group.
On 11th September, Carlyle acquired a 20% equity stake in Piramal Enterprises Ltd. (PEL) valuing the pharmaceutical company’s business at Rs. 20,000 crores, estimated. The deal itself was secured at Rs. 3700 crores after having calculated the company’s debt and expected profits depending on the company’s FY21 performance, as an aftermath of this acquisition.
Ajay Piramal, Chairman, Piramal Enterprises Limited, said, “We are pleased to announce the strategic growth investment by Carlyle, a marquee global investor, in Piramal Pharma. This is an affirmation of the strength of our ability to build new, attractive and scalable businesses with a significant runway for continued organic growth and opportunities for consolidation. This infusion of funds will further strengthen our balance sheet and provide us with a war chest for the next phase of our strategy. We are pleased to have an investor of this calibre join the Piramal family and continue our stellar track record of partnerships.”
Piramal announced the stake sale in June when it started suffering losses, and the company faced an increase in its liabilities. Exposure to weak corporate lenders and developers who borrowed from its non-banking financial company arm were few of the reasons stated by the company.
However, the assessed amount may revise post calculation of the exchange rate, net debt and performance against the conceded amount at the time of closing of the deal. The proceeds from the stake sale would be utilised for growth capital to augment its pharma business through acquisitions.
The Carlyle Group is a US-based global alternative asset management firm which is one of the world’s largest and most successful investment firms worth $195 billion. The Group owns and controls Curie through which the deal would ensue.
“This investment marks the beginning of an important partnership with the Piramal family, and further underscores our commitment to the Indian market. India is a hugely strategic part of Carlyle’s Asia business and a market where we continue to see many attractive investment opportunities where we believe we can collaborate with management teams to drive long-term value for companies and stakeholders.”, Greg Zeluck, Co-Head of Carlyle Asia Partners advisory team, said in a statement.
This will be Carlyle’s second acquisition after having bought India’s largest animal healthcare provider, SeQuent Scientific in May.
SOURCE: ET Healthworld