Parikh family sells ZCL Chemicals to Advent for Rs 2,000 crore

Morgan Stanley Private Equity Asia (MSPEA), a private equity platform that acquired 20 percent stake in ZCL for Rs 150 crore in 2016, has also exited the company for an amount of Rs 390 crore.

March 11, 2021 / 06:09 PM IST
ZCL Chemicals has a state-of-the-art US FDA facility at Ankleshwar, Gujarat (File image: ZCL)

ZCL Chemicals has a state-of-the-art US FDA facility at Ankleshwar, Gujarat (File image: ZCL)

Parikh family, founder and promoters of ZCL Chemicals Limited (ZCL), announced on March 11 that they have sold the entire stake in the company to private equity firm Advent International. The deal was finalised at an equity value of Rs 2,000 crore.

"Pursuant to the signing of definitive agreements last month, Parikh family sold its entire 80 percent holding and has completely exited ZCL," the official statement read.

Of the above stakes, "26 percent will be transferred subject to the customary closing conditions and receipt of all applicable regulatory approvals," it added.

Morgan Stanley Private Equity Asia (MSPEA), a private equity platform that acquired 20 percent stake in ZCL for Rs 150 crore in 2016, has also exited the company for an amount of Rs 390 crore.

Moneycontrol first reported the sale plans of Morgan Stanley PE and the promoters of ZCL Chemicals on August 21, 2020.

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Formerly known as Zandu Chemicals Limited, ZCL has been one of the fastest-growing pharmaceutical companies in the active pharma ingredients or API space in India. APIs are the ingredient for the manufacture of drugs.

In 2008, the Parikh family had acquired ZCL from Zandu Pharmaceuticals Limited at an equity valuation of Rs 12.5 crore. The current value of the firm - at which it has been sold to Advent - 160 times higher than the value at which ZCL was acquired by the Parikh family 12 years ago.

"ZCL has emerged as India’s fastest growing pharmaceutical company in the last 12 years. We are excited to achieve this strategic outcome for ZCL and its investors through this divestment," Nihar Parikh, Founder and Promoter of ZCL, said.

"We are confident that Advent’s resources will be a catalyst for ZCL’s next stage of growth and innovation," he added.

ZCL, which is a debt-free company as on date with surplus cash reserves, has posted a CAGR of 52.64 percent in terms of its valuation for the last 12 years.
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