Dr. Reddy’s labs also reportedly participated in the penultimate bidding round, people with direct knowledge of the matter told ET. The transaction will see the exit of existing investors such as ChrysCapital and Sequoia Capital. The promoters were to remain with a minority stake.
Currently, the Sequoia venture capital fund owns approximately 33.3% of Curatio Healthcare and ChrysCap owns approximately 20%. The promoters, including GK Ramani, and management own the rest. Spokespeople for ChrysCapital, Dr Reddy’s and JB Chemicals declined to comment, while emails sent to Torrent and Sequoia went unanswered by press time on Sunday. Edelweiss and Mape Advisory had been contracted to manage the formal process of finding a buyer.
Half a dozen big pharma — Aurobindo, Biocon, Dr Reddy’s, JB Chemicals, Torrent Pharma and Zydus Healthcare — have been shortlisted in the second round to acquire Curatio Healthcare, ET reported March 7. Others who benefited were PE buyout funds Advent International, Apax Partners and Warburg Pincus.
In 2018, ChrysCap acquired Fulcrum Venture India’s minority stake in a deal worth Rs 130 crore. Sequoia invested around Rs 100 crore in Curatio Healthcare in 2014.
Curatio Healthcare operates a network of more than 700 distributors, reaching more than 6,000 doctors across India, focusing on dermatologists, pediatricians and gynecologists, according to a company statement. Its largest brand is Tedibar baby soap. The Indian skin care products market was valued at Rs 13,000 crore in 2020 and grew at a CAGR of 11%.
The company is expected to record revenue of Rs 240 crore for 2021-2022, with Ebitda of Rs 75 crore. It has a projected revenue of ₹350 crore and Ebitda of ₹100 crore for the current fiscal year, one of the people said. Curatio Healthcare was established in 2005 by a team of former American Remedies executives, including K Ramanathan and Ramani, after their company merged with Dr Reddy’s Labs in 1999. In 2005, angel investor Fulcrum (under founding partner Krishna Ramanathan) and Ramani acquired a 70% stake.
Torrent Pharma a history of significant acquisitions in the Indian pharmaceutical industry. In 2017, Torrent had acquired Unichem’s national brand business for around ₹3.6 billion rupees, the largest acquisition in India.
Its previous largest transaction was the purchase of Elder Pharma’s domestic formulations business for ₹2004 crore in 2014. In 2015, Torrent acquired Zyg Pharma, a manufacturer of dermatological formulations and part of the Encore Group. In 2017, Torrent acquired Regestrone and Pregachieve, brands from Novartis AG’s women’s health segment for Rs 400 crore.
In 2020, the promoters of JB Chemicals, the Mody family, sold a 54% stake in JB Chemicals & Pharmaceuticals to KKR for ₹3.1 billion rupees. Following the deal, JB Chemicals sought acquisitions in the domestic pharmaceutical industry.
In January, JB Chemicals acquired the brands of Hyderabad-based Sanzyme for ₹628 crore, marking its entry into the probiotics, therapeutic nutraceuticals and reproductive health market.
“While capital remains readily available for most life sciences and pharmaceutical industries, the need for clearly defined and achievable value creation plans in an environment where sellers’ expectations of high prices are have become more important than ever is generating shareholder returns The changing regulatory landscape, the potential for tax reform in the US and around the world, and the continued focus on drug affordability will continue to be issues that the industry will need to consider when executing deals in 2022 and beyond,” PwC said in a January report.
India’s pharmaceutical sector recorded deals worth $2.2 billion in 2021 compared to $2.9 billion in 2020.