Piramal fund in talks to acquire ICICI Ventures-backed speciality chemicals maker Anthea Aromatics for $132 million

Piramal’s India Resurgence Fund in talks to acquire ICICI Ventures backed specialty chemicals maker for $132 million

Piramal group’s special situations fund, called India Resurgence Fund (IndiaRF), is in advanced talks to acquire a controlling stake in the ICICI Ventures-backed speciality chemicals maker Anthea Aromatics.

The fund proposes to take control through a mix of primary and secondary investments for a consideration of as much as Rs 1,100 crore ($132 million), sources aware of the development told Moneycontrol.

Anthea Aromatics was founded in 1992 by Dr Vincent Paul, who, prior to setting up the company, had done post-doctoral stints at Columbia and Johns Hopkins universities before returning to India to join the Hindustan Unilever Limited research centre in Mumbai.

Anthea Aromatics manufactures chemical intermediaries used in flavours and fragrances. The company has an in-house research and development centre in Rabale, Navi Mumbai.

ICICI Ventures invested Rs 120 crore in the company in 2016 to acquire a significant minority stake. It holds a 25-30% stake in the company, the sources revealed.

“The discussions are in the final stages and an agreement could be signed in the next few weeks,” said one of the sources.

“ICICI Ventures will sell its entire stake to IndiaRF, exiting its eight-year-old investment, while the promoters will continue to hold a small minority stake. The company has struggled with its new manufacturing facilities in Karnataka, while its facilities in Maharashtra have continued to do well,” the source said.

Anthea Aromatics' operating revenue for the first nine months of FY23 stood at Rs 58 crore, with profit at Rs 8.5 crore, according to a report by rating agency Care Ratings. In FY22, the company had reported a loss of Rs 52.4 crore on revenue of Rs 84.21 crore.

ICICI Ventures declined to comment on the development. Emails sent to Anthea Aromatics and IndiaRF did not elicit a response.

Indian Resurgence Fund Investments

IndiaRF's strategy targets investments across diverse sectors from the industrial sector to the infrastructure and consumer sectors. It eyes businesses where a turnaround can be scripted through recapitalisation and an operational turnaround.

The fund is co-sponsored by the Piramal Group and Bain Capital Credit. IndiaRF raised its first fund of $629 million with two main investors—Canadian pension fund manager Canada Pension Plan Investment Board (CPPIB), and World Bank arm IFC. CPPIB committed $225 million to the fund, while IFC invested $100 million.

Currently, IndiaRF is engaged in conversations to raise its second fund.

The fund announced two major acquisitions in September 2023, the Active Pharmaceutical Ingredients and CRAMS (contract research and manufacturing services) Business of Ind-Swift Laboratories for Rs 1,650 crore, and a controlling stake in Punjab-based hospital chain Ivy Hospitals for Rs 525 crore.

IndiaRF acquired a majority stake in Impresario Entertainment, which runs a popular chain of pubs under the brand Social, in 2022 for Rs 550 crore.

The fund's other investments include Archean Chemical Industries, Setco Automotive, Primacy Industries and Thrissur Expressways.