KKR, Blackstone, Carlyle, Mankind Pharma eye acquisition of Advent-owned Bharat Serums & Vaccines

KKR, Blackstone, Carlyle, Bain, Mankind Pharma eye acquisition of Bharat Serums & Vaccines

The sale process for Bharat Serum & Vaccines Ltd, owned by private equity firm Advent International, has evinced interest from a bunch of global private equity funds, including KKR, EQT, Blackstone, Bain Capital, Carlyle, Partners Group, and Permira, as well as domestic drugmaker Mankind Pharma, sources told Moneycontrol.

Bharat Serums was incorporated in 1971 and is engaged in the development, manufacture and marketing of biological, biotech and pharmaceutical formulations. Its products comprise plasma derivatives, monoclonal, fertility hormones, antitoxins, antifungals, anaesthetics, cardiovascular drugs and diagnostic products. In particular, it focuses on therapeutic areas such as women’s health, assisted reproductive technology and critical care.

Also Read: PE major Advent picks advisors for big-bang sales of Bharat Serum & Manjushree Technopak

The Mumbai-headquartered company has its key manufacturing facility in Ambernath and another smaller facility in Thane. It has a horse farm in Hyderabad, a research and development unit in Navi Mumbai, and four wholly-owned subsidiaries in the US, Germany, the Philippines and India.

Advent had initially acquired a 74 percent stake in Bharat Serums from its erstwhile private equity investors, Orbimed Asia and Kotak PE, and the promoters of the company, the Daftary family, for around $500 million in November 2019. Later, the PE fund also acquired the remaining 26 percent stake of the Daftary family.

“Many PE funds have shown interest in acquiring Bharat Serum. Non-binding bids are expected to come in by the end of the month,” said one of the sources cited above.

The sale of 100 percent of the equity of Bharat Serums is likely to fetch a valuation of up to $1.5 billion or more, the sources said.

Investment banks Jefferies and JP Morgan are advising Advent on the sale of Bharat Serums & Vaccines.

Advent declined to comment on the sale process. KKR, Blackstone, Permira, EQT, and Mankind Pharma also declined to comment. Emails sent to Carlyle, Partners Group, and Bain Capital had not elicited a response at the time of publishing.

Also Read: Advent kickstarts merger process of Suven Pharma & Cohance; engages Kotak & Citi

Bharat Serums witnessed revenue growth of 15 percent to Rs 1,435.4 crore in FY23. The company had reported revenue of Rs 1,235.3 crore in the previous fiscal year, as per a September 2023 report from rating agency ICRA.

“The revenue from women health and assisted reproductive technology grew by 42% and 230%, respectively, in FY2023. The company is one of the largest manufacturers of the anti-fungal drugs, Amphotret, Amphomul, Amphonex and Ampholip. The products saw significant traction in FY2022 as they were used in the treatment of the black fungus infections amid the second wave of the Covid-19 pandemic; although the revenues moderated in FY2023 as Covid subsided, resulting in moderation of revenues by 23%, the ICRA report noted.

Although the growth in Ampho sales may see a moderation in the near term over FY2022 levels, it is expected to be offset by growth in other segments, "which will also be supplemented by the addition of the TTK portfolio”, the ICRA report added.

Further, it said that the company’s top 10 products contributed more than 90 percent of its revenues in FY23.

“Moreover, majority of the company’s revenues, above ~80% in FY2023 were derived from the critical care and women’s health segment," it added. There was comfort in the niche product profile of the company and its healthy market share in the aforesaid segments, the ICRA report stated.

In March 2022, Chennai-based TTK Healthcare signed agreements to sell its human pharma division to Bharat Serums for Rs 805 crore.