The Carlyle Group has signed a deal worth around $490 million with Piramal Enterprises, to acquire a stake of 20% from the Indian conglomerate’s pharma business – Piramal Pharma.

The US-based private equity firm will carry out the acquisition through CA Clover Intermediate II Investments, an affiliated entity of CAP V Mauritius, which is an investment fund managed and advised by the group’s affiliated entities.

The transaction values Piramal Pharma at an enterprise value of $2.77bn with an upside component of up to $360m which will depend on its full-year 2021 performance.

Ajay Piramal – Chairman of Piramal Enterprises 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.”

Piramal Pharma is made up of four units, which include Piramal Pharma Solutions, a contract development and manufacturing (CDMO) business, which recently acquired the solid oral dosage drug product manufacturing facility in Sellersville, Pennsylvania from G&W Laboratories for $17.5 million.

Also part of the Indian pharma group is a complex hospital generics business called Piramal Critical Care that supplies specialized products to 100 plus countries.

A consumer healthcare business that produces over-the-counter products sold across India and Piramal Enterprises’ participation in the Allergan India, an ophthalmology-focused firm, and Convergence Chemicals, make up the Piramal Pharma business.

Neeraj Bharadwaj – Managing Director of 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.”

According to Carlyle Group, the final consideration for the deal will be calculated on the net debt, exchange rate, and performance against the pre-agreed conditions at the time of closing, which is expected to occur by the end of this year, subject to regulatory approvals and other  customary closing conditions.

The private equity firm engaged J.P. Morgan as a financial advisor for the transaction, while AZB & Partners and White & Case are the legal advisors. On the other hand, Piramal Enterprises has Rothschild & Co as a financial advisor, while Cyril Amarchand Mangaldas and Covington & Burling are the legal advisors.

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