Race for TPG-backed Sai Life Sciences: Bain Capital likely lead suitor at $800 mn valuation

In 2018, TPG Capital invested around $135 million in Sai Life Sciences and the firm currently holds a 43.4 percent stake (representational image)

US-based private equity major Bain Capital has emerged as the likely front-runner to acquire a majority stake in TPG Capital-backed Sai Life Sciences, multiple industry sources told Moneycontrol on the condition of anonymity.

The proposed transaction is expected to value the Hyderabad-based contract research, development, and manufacturing organisation (CRDMO) target at around $800 million, in one of the biggest deals in the niche segment, these sources added.

"Bain Capital had bid aggressively earlier and may have an edge over other suitors currently. TPG Capital is looking to make a complete exit via this deal along with the other investors and if the promoter group also dilutes part stake, this would lead to a change in control," said one of the persons above.

In 2018, TPG Capital invested around $135 million in Sai Life Sciences and the firm currently holds a 43.4 percent stake. HBM Private Equity India holds six percent while the balance is held by the founder family/promoter group.

"Bain Capital is seen as the lead contender at this stage and their team is very busy on the transaction. This will be a good outcome for outgoing TPG Capital if the deal goes through and a signing can be expected in the next few weeks," a second person elaborated.

A third person also confirmed the above and told Moneycontrol that investment bank Jefferies was the sell-side advisor to the ongoing sale process.

Advent International, KKR, and US-based Charles River are some of the rival bidders that had expressed interest in the deal, the third person added. Others may re-enter the race later if ongoing talks with Bain Capital did not fructify into an eventual transaction, this person said.

All three persons above spoke to Moneycontrol on the condition of anonymity.

Bain Capital and TPG Capital declined to comment in response to a query from Moneycontrol. A query sent to Sai Life Sciences was left unanswered at the time of publishing this article. An immediate comment could not be elicited from Jefferies and the other suitors.

On April 26, 2023, ET NOW was the first to report Bain Capital's interest in buying a stake in Sai Life Sciences.

According to its website, Sai Life Sciences works with over 300 global innovator pharma and biotech companies to accelerate the discovery, development, and commercialisation of their NCE (new chemical entity) small molecule programmes. The firm has over 3,000 employees across its facilities in India, the UK, the US, and Japan. It is led by Chairman Dr K Ranga Raju and MD & CEO Krishna Kanumuri.

Incidentally, TPG Growth (the mid-market and growth equity investment platform of TPG) has a CDMO (contract development and manufacturing organisation) firm in its India portfolio, namely Stelis Biopharma, which recently sold its biologics facility to Syngene.

Private equity players have been at the centre of M&A action in the CRDMO and CDMO space in India in recent years.

In December 2022, Private equity investor Advent International entered into a definitive agreement to acquire a significant stake in Suven Pharmaceuticals. Advent intends to explore the merger of its portfolio company Cohance Lifesciences with Suven to build an end-to-end CDMO and merchant API player servicing the pharma and specialty chemical markets.

Also read: Advent confirms buying significant stake in Suven Pharma, weighs merger with Cohance

In May 2021, Wall Street powerhouse Goldman Sachs 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.

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