The transaction values the pharma business at an enterprise value of USD 2.775 billion (over Rs 20,980 crore), with an upside component of up to USD 360 million
Piramal Enterprises share price was up over a percent at open on June 29 after US-based global investment firm Carlyle Group Inc said it will buy 20 percent stake in Piramal Pharma for around USD 490 million.
The stock price has surged over 65 percent in the last 3 months. On June 29 morning, it was trading at Rs 1,353.30 up Rs 10.70, or 0.80 percent.
The capital raise will accelerate Piramal Pharma’s organic and inorganic growth plans, the Ajay Piramal-led Piramal Enterprises and Carlyle Group said in a joint statement.
“… CA Clover Intermediate II Investments, an affiliated entity of CAP V Mauritius Ltd, an investment fund managed and advised by affiliated entities of The Carlyle Group Inc has agreed to invest fresh equity capital for a 20 per cent stake in Piramal Pharma Ltd…,” it said.
The transaction values the pharma business at an enterprise value (EV) of USD 2.775 billion (over Rs 20,980 crore), with an upside component of up to USD 360 million (over Rs 2,720 crore) depending on the company’s FY21 performance, the statement said.
“Based on the EV (excluding the upside component), exchange rate and pharma net debt as on March 31, 2020, the estimated equity capital investment for Carlyle’s 20 per cent stake in Piramal Pharma would amount to USD 490 million (over Rs 3,700 crore),” it added. The final amount of equity investment will depend on the net debt, exchange rate and performance against the pre-agreed conditions at the time of closing of the deal. The transaction is expected to close in 2020, it added.JP Morgan served as financial advisor and AZB & Partners and White & Case served as legal advisors to Carlyle.