Piramal Enterprises has planned to sell a 20 per cent stake in its pharmaceutical unit to Carlyle Group for around $490 million. Piramal has decided to integrate its pharmaceuticals businesses into its wholly-owned subsidiary Piramal Pharma and use the money raised to expedite its organic and inorganic growth plans.
Chairman of Piramal Enterprises, Ajay Piramal 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”.
The deal between Piramal and Carlyle is expected to close within the year 2020 and the transaction involved is subject to regulatory clearance. The final investment amount in the deal will depend on the net debt, exchange rate and performance against the prior agreed conditions.
Piramal said that this private equity deal is the largest in the country’s pharmaceutical sector. According to Carlyle, it has invested more than $2.5 billion in India as of March 31, 2020. Co-head of Carlyle Asia, Greg Zeluck said, “This investment marks the beginning of an important partnership with the Piramal family, and further underscores our commitment to the Indian market”.
On June 27, Piramal Enterprises said in a regulatory filing that the deal values its subsidiary company Piramal Pharma at an enterprise value of $2,775 million, with an upside component of up to $360 million depending on the company’s performance in the FY21.