General Atlantic may buy stake in Strides Arcolab
24 Nov 2009
American private equity firm General Atlantic is in advanced talks with Strides Arcolab to buy a significant minority stake in Bangalore-based Strides Arcolab's injectables business arm for about $100 million, according to a report.
The Economic Times quoted unnamed sources to say GA is eyeing a 30-40 per cent stake in the Indian company's injectables business, which is housed in a subsidiary called Strides Specialties, and clarity on the exact structure of the deal would emerge in the next three weeks.
The report says that Strides has valued its injectables business at $300-400 million. However, both companies dismissed the report as speculative.
Strides had recently inducted New York-based financial advisory firm Lazard to bring investors on board for its injectables business. The American PE firm, which ranks among the top 50 private equity firms globally, now joins the Carlyle Group and 3i, who also had initial discussions with the Indian pharma company.
The Bangalore-based pharmaceutical company manufactures sterile injectables and oral dosage formulations, including tablets and soft gel capsules. The attractive valuations quoted by global pharmaceuticals companies have surprised industry experts and have raised the expectations of Indian promoters.
Earlier this year, the listed Indian company announced a corporate re-structuring to hive off its R&D into a separate unit and its sterile injectables business into a speciality pharma subsidiary called Strides Specialities, while the parent company would retain the pharmaceutical business.
Strides' speciality pharma business is the fastest-growing segment for the group, delivering revenues of Rs 300 crore in the calendar year 2008. It invested Rs350 crore in its injectable arm recently. Three years back, Strides had signed a term-sheet agreement with Matrix for a merger, but that deal fell through.
