Cadila Healthcare share price rallied 7 percent intraday on May 12 after the company informed the exchanges that a consortium of investors—Multiples Alternate Asset Management, Canada Pension Plan Investment Board (CPPIB) and Rakesh Jhunjhunwala-backed Rare Enterprises—will buy its animal healthcare business for Rs 2,921 crore.
The stock price was trading at Rs 650.50 on the BSE, up 3.30 percent over the previous close. It nearly doubled in the last one year.
"Zydus Animal Health and Investments (ZAHL), a wholly owned material subsidiary of Cadila Healthcare, has entered into a Business Transfer Agreement (BTA) and other ancillary agreements to sell and transfer its Animal Healthcare Established Markets Undertaking (Zydus AH) to Multiples Alternate Asset Management led consortium," said Cadila in its BSE filing on May 12.
Also read: Consortium of Multiples PE, CPPIB & Rakesh Jhunjhunwala to buy Cadila’s animal health business for Rs 2,921 crore
Zydus Animal Healthcare is the animal health business of Zydus Animal Health and Investments focused on India and certain other countries.
"The consortium, including Canada Pension Plan Investment Board (CPP Investments) and RARE Enterprises, has agreed to purchase the Zydus Animal Healthcare through an SPV controlled by them, in the name of Zenex Animal Health India," Cadila said.
Moneycontrol was the first to write on March 8, 2021 that a Multiples-backed consortium had emerged as the front-runner for the proposed sale.
"The deal is to sell one of the two business undertakings of ZAHL, called Animal Healthcare Established Markets Undertaking on a slump sale basis as a going concern, for a lump sum consideration of Rs 2,921 crore on a cash free and debt free basis, subject to certain closing date adjustments and other conditions.
Zydus Animal Healthcare, which has a manufacturing facility in Haridwar, is the second-largest and one of the fastest-growing animal health businesses in India. The business enjoys a leadership position across a wide spectrum of therapeutic and nutritional products for livestock and poultry animal segments.
"Over the last three decades, Zydus Animal Healthcare has grown to become a pioneer and market leader in the Indian animal health industry. With Multiples and its consortium partners committed to growing the business, we are sure that Zydus AH will continue to grow and strengthen its position in the industry," said Pankaj Patel, Chairman at Cadila Healthcare.
Multiples, along with its consortium partners, will acquire 100 percent business of Zydus Animal Healthcare through a slump sale transaction.
The transaction is expected to be completed within a period of 90 days, said Cadila.
"We are delighted to partner with CPP Investments and Multiples in investing into a market-leading business, in a segment which has huge growth potential and has a top quality management team," said Rakesh Jhunjhunwala, Partner at RARE Enterprises.
Cadila said Zydus Animal Health and Investments has another animal healthcare business undertaking which is expected to commence animal health business in the US and certain European countries and this business undertaking is not part of the transaction.