Cadila Healthcare’s animal health business: Multiples PE-CPPIB alliance emerges frontrunner

Founded in 2009, Multiples PE is headed by CEO & Founder Renuka Ramnath, the former MD & CEO of ICICI Ventures. In the pharma & healthcare segment, Multiples PE has invested in firms like Natco Pharma, Encube Ethicals and Bengaluru-based Vikram Hospitals.

March 08, 2021 / 06:01 PM IST
Representative image.

Representative image.

Renuka Ramnath-led homegrown private equity firm Multiples Alternate Asset Management and Canadian pension fund giant CPPIB (Canada Pension Plan Investment Board) have teamed up to emerge as the lead contenders to acquire Cadila Healthcare’s (also known as Zydus Cadila) animal healthcare business, people with knowledge of the development told Moneycontrol.

“Multiples PE and CPPIB have joined hands for this big-ticket deal. As a limited partner of Multiples PE, CPPIB will provide funding support for the transaction. They are the frontrunners at this stage for Zydus AHL ( Animal Health & Investments),” said one of the persons cited above.

“Multiples PE is aspirational and was keen on a big control deal. They have entered into exclusive negotiations for the buyout of the animal healthcare business of Cadila Healthcare,” added a second person. Earlier reports had also named rival private equity funds Warburg Pincus, CVC Capital Partners and Temasek as potential suitors for the transaction.

The Timing

“The deal is likely to be valued between Rs 2,500 crore and Rs 3,000 crore. This is a strategic move by Cadila Healthcare as part of which it wants to prune its diversified business portfolio to focus on a few select verticals,” said a third person.


Cadila Healthcare is developing a COVID-19 vaccine candidate and is looking to expand its vaccine capacity as India looks to ramp up vaccine production to combat the spread of the pandemic. In 2018, Zydus Wellness (in which Cadila Healthcare holds a majority stake) had acquired Complan owner Heinz India’s portfolio for Rs 4,595 crore.

Later in September 2020, Zydus Wellness raised Rs 650 crore via a QIP (Qualified Institutional Placement). As on September 30, Cadila Healthcare’s net debt stood at Rs 4,031 crore against Rs 6,740 crore as on March 31.

“The animal healthcare segment is doing well and is fetching rich valuations. It has domestic market potential as well as export potential,” the third person cited above elaborated.

A fourth person also confirmed that the Multiples PE-CPPIB combine was in the pole position for the proposed deal.

All the four persons spoke to Moneycontrol on the condition of anonymity.

In response to an email query from Moneycontrol on the proposed transaction, a Zydus Cadila spokesperson said, “We strongly deny this.” CPPIB declined to comment on “market speculation." Moneycontrol is awaiting an email response from Multiples PE and has sent reminders. This article will be updated when we hear from the firm.

In May 2020, private equity firm Carlyle bought a majority stake in animal healthcare firm Sequent Scientific Ltd.

In the pharma & healthcare segment, Multiples PE is invested in firms like Natco Pharma, Encube Ethicals (a contract development & manufacturing organisation for dermatology products) and Bengaluru-based Vikram Hospitals. It also backs Delhivery, Dream11, Arvind Fashions, Livpure, PVR Cinemas and RBL Bank. It has more than $1.5 billion in management.

Founded in 2009, it is headed by CEO and founder Renuka Ramnath, the former boss of ICICI Ventures, the venture capital arm of the ICICI Group. CPPIB is headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney.

On December 31, 2020, the fund totalled $475.7 billion. On December 10, 2020, CNBC TV-18 had reported that Cadila Healthcare was looking to sell its animal healthcare business.

A Closer Look At The Target

Zydus AHL is a wholly-owned subsidiary of Cadila Healthcare which provides total healthcare solutions ranging from formulations, active pharmaceutical ingredients, wellness products, diagnostics to animal healthcare products.

According to its website, the firm holds leadership positions in the antimicrobials, vitamin injections, anti-mastitis, corticosteroids, hormones and intra-mammary segments. It also has a strong presence in poultry vaccines, antibiotic growth promoters, anti-coccidials, nutritionals and others.

Zydus AHL has a state-of-the-art manufacturing facility at Haridwar and has tied up with Phibro AHC to market their products in India and Nepal, the website said.
Ashwin Mohan

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