Mega sale of Advent-backed Bharat Serums: Mankind Pharma emerges as likely front-runner

Mumbai-based Bharat Serums and Vaccines Limited was set up in 1971 and is engaged in the development, manufacturing and marketing of biological, biotech and pharmaceutical formulations.

Mankind Pharma is likely to have emerged as the leading contender to acquire Advent International-backed Bharat Serums & Vaccines following the submission of binding bids, people familiar with the development said.

A consortium, led by Swedish private equity firm EQT and the Abu Dhabi Investment Authority (ADIA), is the other suitor in the fray for buying BSV in a deal that is estimated to value the pharma company between $1.5 billion and $2 billion.

"Mankind Pharma is the likely front-runner now, though there is no clarity on whether an exclusivity pact has been signed as yet. Factors like bid value and taxation are likely to have played a key role along with deal approval timelines. Mankind Pharma being a domestic player will be in a position to acquire 100 per cent of the target at one go, as compared to a foreign suitor which requires government approval beyond 74 per cent stake," said one of the persons cited above.

A second person confirmed the above and said an official signing on the proposed transaction was expected shortlyWhen contacted, Mankind Pharma and Advent Interational declined to comment on an email query from Moneycontrol.

Moneycontrol was the first to report BSV's sale plans and the appointment of sell-side advisors on December 2 and December 20 respectively.

Later, on July 3, Moneycontrol was also the first to report that the EQT-ADIA combine, and Mankind Pharma were the key contenders for the buyout.

Mankind Pharma had bid previously for Apax Partners-promoted medical devices player Healthium Medtech, but KKR edged ahead to win the auction process. The drugmaker's share price has risen by 11.5 per cent in the last one year. A buyout of Bharat Serums & Vaccines would bolster Mankind Pharma’s domestic operations as its product portfolio consists of formulations across acute and therapeutic areas.

A closer look at BSV

Advent announced the buyout of a controlling stake in Bharat Serums in November 2019, providing a complete exit to the erstwhile investors, Orbimed Asia and Kotak PE. A partial exit was given to the founders, the Daftary family. Back then, the deal valued the firm at around $500 million.

Mumbai-based Bharat Serums and Vaccines Limited was set up in 1971 and is engaged in the development, manufacturing and marketing of biological, biotech and pharmaceutical formulations.

According to a note by ICRA Ratings dated September 11, 2023, its product profile comprises plasma derivatives, monoclonal, fertility hormones, antitoxins, antifungals, anaesthetics, cardiovascular drugs, diagnostic products and more. The firm has a key manufacturing facility at Ambernath and another smaller facility at Thane. It also has a horse farm in Hyderabad, an R&D unit at Navi Mumbai and four wholly-owned subsidiaries in the US, Germany, the Philippines and India.