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Carlyle Group picks 20 percent share in Piramal Pharma for $490 million

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Piramal Enterprises Limited on Saturday said, “Global investment firm Carlyle Group has agreed to invest around $490 million to pick 20 percent stake in Piramal Pharma, a wholly-owned subsidiary of Piramal Enterprises Limited.”

In a statement issued, Piramal Enterprises said, “The transaction value of the Pharma Business is at an enterprise value (EV) of $2.77 billion with an upside component of up to $360 million depending on the company’s FY21 performance, based on the EV exchange rate and pharma net debt as of 31st March 2020. Estimated equity capital investment for Carlyle’s 20% stake in Piramal Pharma would amount to $490 million.”

“The final amount of equity investment will depend on the debt exchange rate and performance against the pre-agreed conditions at the time of closing of the deal,” the statement added.

Speaking on the investment, Ajay Piramal, Chairman of Piramal Enterprises Limited in his statement 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 caliber join the Piramal family and continue our stellar track record of partnerships,” Ajay added.

Adding to the statement, Neeraj Bharadwaj, Managing Director, Carlyle Asia Partners advisory team said, “Piramal Pharma has built a strong, diversified pharma business with a solid market position and scale in each of its core business segments of Pharma Solutions, Critical Care and Consumer Products. Given global pharma industry trends, we see attractive opportunities for organic as well as inorganic growth in each of these businesses.”

“We are excited to work with the company’s experienced management team, and will leverage our global network, extensive knowledge of the healthcare sector, and operating experience to seek to expand its platform, develop strategic opportunities and facilitate broader market access,” Neeraj added.

Commenting on the investment from Carlyle, Nandini Piramal, Executive Director of Piramal Enterprises said, “This fresh growth investment into our pharma business will be used as growth capital for the pharma businesses to expand capacity across our sites as well as to tap attractive acquisition opportunities within and outside India. In the interim, the proceeds from this capital raise may also enable us to further strengthen our balance sheet through deleveraging in the near term.”

“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, Carlyle Asia Partners advisory team said.

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