PE Funds Advent, Kedaara in discussions to acquire Sequent

Private equity investors, including US-based Advent International and home-grown fund Kedaara Capital, are in initial talks to acquire Sequent Scientific Ltd, India's largest animal healthcare company. In this proposed deal, which is expected in the range of Rs 2,500 crore ($350 million), promoters and an existing private equity investor will exit, two people aware of the development said.The founder promoters of Sequent, including serial entrepreneur Arun Kumar, KR Ravishankar and family, together hold about 56.5% in the listed entity, while PE investor Ascent Capital holds 5% stake. JP Morgan is running the sale process.The sale will also involve an open offer. If fully subscribed, the new buyer could end up controlling more than four-fifths of the company.A spokesperson at Advent declined to comment, while a mail sent to Kedaara did not elicit any response. Manish Gupta, Managing Director, Sequent Scientific, declined to comment, saying the company would inform exchanges in the event of any transaction.The promoter family of Sequent is all set to exit the business, ET reported on December 4.Arun Kumar and KR Ravishankar also own stakes in two listed companies — Strides Pharma Science and Solara Active Pharma Sciences - as promoters.Sequent manufactures and markets 26 commercial Active Pharmaceutical Ingredients (API) and 1,000 finished dosage formulations (FDF) across 12 dosage forms in more than 100 countries worldwide. It owns eight manufacturing assets in India, Spain, Germany, Brazil and Turkey. It posted revenue of $150 million (Rs 1,000 crore) in FY19.“There is more interest from PE investors. Strategic buyers are not keen on the API business as most clients are their competitors globally,” said one of the persons cited above.Sequent has a market capitalization of Rs 2,077 crore. It posted Rs 133 crore EBITDA and a net profit of Rs 57 crore in FY19.Sequent generated Rs 714 crore from formulation sales and Rs 325 crore of API sales in FY19.If the deal materialises, it would be the fourth acquisition of Advent International in India in the past six months.In September, Advent International had acquired DFM Foods, which sells packaged snack foods under CRAX brand while the fund had acquired a 100% stake in Enamor, a leading women’s premium innerwear brand in India in October. In November, Advent had acquired Mumbai-based biopharma company Bharat Serums and Vaccines (BSV). Other buyouts of Advent in India include Manjushree Technopack and innerwear brand Dixcy Textiles.In a rare deal in the animal health industry in India, ICICI Venture had sold Vetnex Animal Health — the animal health division of RCFL (erstwhile Ranbaxy Fine Chemicals) to Pfizer for $75 million (Rs 375 crore). ICICI Venture had acquired RFCL (erstwhile Ranbaxy Fine Chemicals) from Ranbaxy in December 2005.The global animal health industry is expected to grow at a CAGR of 4.8% to reach $ 45 billion by 2025 while India's animal healthcare market stood at $460 million in 2015, and is expected to expand to $1 billion in 2025.

from Economic Times https://ift.tt/3afGclN