Adar Poonawalla-led Serum Institute seals 30%-40% stake sale in SCHOTT Poonawalla to TPG Growth; target firm valued around $800 mn

Mumbai-headquartered Schott Poonawala is a leading primary glass packaging provider for the pharma and biotech sectors

Billionaire Adar Poonawalla-led Serum Insititute of India has agreed to sell 30 percent to 40 percent stake held by the top vaccine maker in SCHOTT Poonawalla to US private equity firm TPG, three persons in the know told Moneycontrol on the condition of anonymity.

On October 25, Moneycontrol was the first to report the proposed transaction

Mumbai-headquartered Schott Poonawala is a leading primary glass packaging provider for the pharma and biotech sectors and a 50:50 joint venture between Serum Institute of India and SCHOTT Pharma AG & Co, which is part of German speciality glass firm SCHOTT AG.

" The deal has been signed between both parties and a few other formalities are pending. Serum Institute which made the investment more than three years back, plans to unlock value with the sale of 30 percent to 40 percent stake (out of the existing 50 percent stake) in the joint venture to TPG Growth," one of the persons above told Moneycontrol.

According to a second person familiar with the deal, "Serum Insititute does not plan to make a full exit from the JV and intends to hold on to the balance stake. The equity valuation of SCHOTT Poonawalla in this deal is seen at around $800 million and going ahead the firm will be a three-way partnership between SCHOTT Pharma, TPG Growth and Serum Institute "

At an equity valuation of $800 million, a 30 percent to 40 percent stake in SCHOTT Poonawalla would be worth $240 million to 320 million.

A third person told Moneycontrol, "The injectables market is a fast-growing segment. SCHOTT Poonawalla is a unique asset and a clear market leader with an over 50 percent market share in injectable packaging and hence TPG saw an opportunity."

TPG Growth and Serum Institute of India declined to comment. Moneycontrol is awaiting the response to an email query sent to SCHOTT Poonawalla.

When contacted, a spokesperson for SCHOTT Pharma had said, "SCHOTT Poonawalla is a 50 – 50 joint venture between the Serum Institute of India and SCHOTT Pharma AG & Co. KGaA. In general, we do not comment on matters related to our partners or customers."

The statement to Moneycontrol added, "We remain focused on our joint venture and its continued success. India plays a vital role in our manufacturing network, and we have significantly increased our production capacity over the years. The region is a pharmaceutical manufacturing hub and one of our most important markets. Please refer directly to the Serum Institute of India for any specific questions regarding their business."

Established in 1990 as a premium manufacturer of tubular glass pharmaceutical containers, SCHOTT Poonawalla makes pharma packaging products such as vials, syringes, ampoules and cartridges used to package life-saving medications. According to its website, the firm has four manufacturing sites in states like Gujarat and Himachal Pradesh with over 2,000 employees

A closer look at TPG, Serum Institute and SCHOTT Pharma

Three and a half years earlier, the Indian arm of TPG Growth led by Ankur Thadani had steered a $125 million series C round of funding in OneSource Speciality Pharma ( formerly Stelis Biopharma). OneSource offers end-to-end development and manufacturing services for injectables, biologics and drug device combinations.

In the Indian pharma and healthcare space,  TPG Growth also backs the likes of eye-treatment focused Dr Agarwal's Healthcare, Nova IVF Fertility and hospital chain Motherhood.

Post the outbreak of Covid-19, in August 2021, Serum Institute,  the world‘s largest vaccine producer and manufacturer of highly effective biologics purchased 50 per cent stake in the Indian joint venture SCHOTT Kaisha from former co-owners Kairus Dadachanji and Shapoor Mistry.

Recently, Adar Poonawalla-led Serene Production announced the buyout of a 50 percent stake in Karan Johar's Dharma Productions and Dharmatic Entertainment, for Rs 1,000 crore.

Mainz, Germany headquartered international technology group SCHOTT AG belongs to the Carl Zeiss Foundation. It produces high-quality components and advanced materials, including specialty glass, glass-ceramics, and polymers.

The SCHOTT Pharma product portfolio ranges from drug containment solutions to drug delivery systems with clients including big pharma innovators, leading CDMOs (contract development manufacturing organisation's), biotech's and startups. The firm has more than 1000 patents and produces more than 13 billion drug containers annually.