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Goldman Sachs to provide exit to PE firm ChrysCapital, acquire significant minority stake in GVK Biosciences

This is the second domestic pure play pharma investment by the Goldman Sachs group. In November 2020, it pumped in $150 million in Kiran Mazumdar Shaw-led Biocon Biologics. Goldman Sachs is an active investor in India, deploying more than $3.6 billion in capital since 2006

May 19, 2021 / 06:31 PM IST
Source: Reuters

Source: Reuters

Wall Street powerhouse Goldman Sachs has acquired the minority stake held by homegrown private equity firm ChrysCapital and other existing shareholders in GVK Biosciences (now called Aragen Life Sciences), according to an official announcement by the top contract research player.

This is the second domestic pure-play pharma investment by the Goldman Sachs group. In November 2020, it pumped in $150 million in Kiran Mazumdar Shaw-led Biocon Biologics.

On October 9, 2020, Moneycontrol was the first to report that Chrys Capital was exploring an exit from GVK Biosciences and that other key shareholders may also consider a part stake sale depending on valuations.

 

Later, on April 18, 2021, Moneycontrol was the first to report that Goldman Sachs had emerged as the front runner to provide an exit to ChrysCapital.

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The report had also indicated that the co-promoters of the target firm, namely GVK group and DS Brar, the former CEO and managing director of Ranbaxy Labs may also sell part stake as part of the proposed transaction.

As of March 2020, ChrysCapital held a 16.77 percent stake in the firm. On the other hand, Brar and his family members and the GVK family, directly and indirectly, held 41.01 percent shares each in the firm as of March 2020.

ChrysCapital entered the firm in 2015 when it picked the 10 percent stake held by Sequoia Capital. Back then, the secondary purchase valued GVK Biosciences at $250 million. As of March 2020, ChrysCapital held a 16.77 percent stake in the firm.

On the other hand, Brar and his family members and the GVK family, directly and indirectly, held 41.01 percent shares each in the firm as of March 2020. Pharma industry veteran Sanjiv Kaul is a partner with ChrysCapital and sits on the GVK Biosciences board.

The official announcement says a “significant minority stake” has been picked up by Goldman Sachs but does not specify deal valuations, the name of the “other existing shareholders” or the quantum of stake sold by them.

“We believe this new investment at this important juncture in our company’s development underscores the tremendous opportunity ahead. Working with Goldman Sachs, we are well-positioned to address the opportunities in front of us to become a leading, global player with comprehensive end-to-end solutions for drug discovery and development,” said Manni Kantipudi, CEO of Aragen Life Sciences. “For more than five years, ChrysCapital has been a trusted investment partner. Following their successful exit, we are pleased to now enter a new phase in our continued evolution.”

“Aragen is well positioned to benefit from the secular trend of increased outsourcing by the life sciences industry. With a clear value creation plan in place, we look forward to closely working with the management and shareholders of Aragen.” said Rajat Sood, a managing director at Goldman Sachs Asset Management. “Goldman Sachs is actively seeking to invest and foster leading, national champions of India who are building companies of a global scale.”

ChrysCapital, one of India’s largest private equity firms and most successful pharma investors, has sealed blockbuster exits in the past from Infosys, Mankind Pharma and Intas Pharma.

Goldman Sachs is an active investor in India, deploying more than $3.6 billion in capital since 2006. Over and above the pure-play pharma category, in the domestic healthcare segment, it has previously invested in Bengaluru-based CyteCare Hospitals, infertility treatment chain Nova IVF, BPL Medical Technologies and pharmacy retail chain MedPlus.

A CLOSER LOOK AT THE TARGET FIRM

Aragen Life Sciences is a leading player in discovery, development and manufacturing solutions. It offers differentiated contract research organization (CRO) and contract development and manufacturing organization (CDMO) solutions for small and large molecules. It has a presence across seven sites in India and overseas and employs over 3,000 professionals globally and serves more than 450 life sciences customers across biotech and large-cap companies.

The firm also manufactures APIs and API intermediates and its annual revenues increased from Rs 795 crore in 2019 to Rs 951 crore in 2020. PAT (profit after tax) rose from Rs 61 crore to Rs 99 crore during the same period.

Drug discovery services are the major revenue contributor, accounting for around 50 percent of the revenue in fiscal 2020. The company has more than 2,200 employees, with facilities in Hyderabad, Bengaluru, and Visakhapatnam, and Morgan Hill, California.
Ashwin Mohan
first published: May 19, 2021 01:10 pm

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