Race for Glenmark Life Sciences: Blackstone, KKR, BPEA EQT, PAG and Nirma Group likely suitors

glenmark

A raft of bulge-bracket private equity funds have expressed preliminary interest in the ongoing process to sell a majority stake in API (active pharmaceutical ingredients) developer and manufacturer Glenmark Life Sciences, a subsidiary of pharma major Glenmark Pharmaceuticals, multiple industry sources with knowledge of the matter told Moneycontrol.

"Initial bids have come in for the deal and the likes of KKR, Blackstone, BPEA EQT and PAG are likely to have shown interest in the proposed transaction," said one of the persons cited above.

A second person told Moneycontrol that detergents to cement conglomerate Nirma Group may have also thrown its hat in the ring.

The Ahmedabad-headquartered group is looking at inorganic forays into the pharma sector and recently acquired a 100 percent stake in Stericon Pharma Private Limited, a Bangalore-based contract development manufacturing organisation (CDMO) that makes sterile contact lens cleaning solutions and eye drops

ALSO READ: Nirma Group makes fresh bet on pharma, buys out CDMO player Stericon

At the end of the day's trade on May 22, 2023, the market cap of Glenmark Life Sciences stood at Rs 6,478 crore. The share price of the firm, which hit a 52-week high recently after posting a set of strong Q4 results, has risen by nearly 30 percent in the last three months.

ALSO READ: Glenmark Life hits 52-week high as strong Q4 earnings bolsters sentiment

A third person familiar with ongoing discussions said that parent Glenmark Pharma which holds an 82.85 percent stake in Glenmark Life was looking to reduce its debt burden via the stake sale process. The firm's net debt was Rs 2,615 crore as of December 2022, according to a report by CNBC TV-18.

"Kotak Mahindra Capital has been mandated to scout for buyers. The firm has time till August 2024 to bring the promoter stake down to 75 percent as per Sebi norms," the third person added.

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

An email query sent to Glenmark Pharmaceuticals was left unanswered at the time of publishing this article.

KKR and Blackstone declined to comment. Moneycontrol has sent reminders and is awaiting an email response from BPEA EQT, PAG and Kotak Mahindra Capital. We will update this article when we hear from the parties.

LENS ON GLENMARK LIFE

According to its website, Glenmark Life Sciences is a research and development (R&D)-driven API manufacturer with a local presence in markets like North America, the United Kingdom and Latin America. It supplies APIs to more than 700 pharma companies in multiple countries.

The firm caters to chronic therapeutic areas such as cardiovascular disease, central nervous system disorders, pain management and diabetes, among others.

Its FY22-23 revenue and net profit stood at Rs 2,161 crore and Rs 466 crore respectively.