IPO to give exit route to financial investors; Bain Capital said to be re-evaluating deal
Mumbai: A continuing public
market rally despite high stock
valuations has made the promoters of Hyderabad-based Sai Life
Sciences explore an initial public offering as an alternative to their
original plan of roping in a private equity investor, people in the
know said.
A public listing would also give an exit route to existing financial
investors including TPG Capital,
the people said. The sole contender for the stake,
Bain Capital, also has been reevaluating its plan, especially due to the $800 million to $1 billion
(%6,500-8,300 crore) valuation that
the promoters, the Kanu muri family, have been expecting for the
pharmaceutical contract research, development and manufacturing organisation, they said.
Bain is still engaged in discussions with the promoters, but the
TPO option is gathering momentum, the people said.
‘The company's financial per for running the sale process. US, European Union and the UK, At present, PE investor TPG Capital holds about a 43.3% stake in
Sai Life, while Swiss-healthcare
fund HBM Private Equity India
ownsanother6%. The Kanu muri family owns the rest of the stake.
TPG took the stake in 2018 with a
$135 million (about 900 crore at
the time) investment.
Sai Life is an integrated contract research & manufacturing
services provider, and offers drug discovery, development, and manufacturing services to leading
global pharmaceuticals and biotechnology companies. The company is also engaged in generic
active pharmaceutical ingredient and formulation supply upon a product going off-patent.
It has manufacturing and research & development facilities in
Telangana, Karnataka and Maharashtra.
Sai Life reported 870 crore of
revenue in fiscal 2022, and Ebitda
of %120 crore (%160 crore in FY21) with a margin of 14.4% (21.5%),
according to an India Ratings report. Sai Life expects Ebitda of
%300 crore in FY24, said people in
theknow.
With a significant presence in
regulatory markets such as the
about90% of Sai Life's FY22revenue was generated from the global markets.
It offers integrated
services across the pharmaceutical life cycle from discovery services (29% of revenue in FY22) to
development & manufacturing
(71% revenue) of new chemical
formulations for global innovator pharmaceutical and biotechnology company:
Sai Life has worked on more
than 100 molecules across different phases of the molecular lifecycle.
In the pharma contract research, development and manufacturing industry, Advent International last Thursday
announced the merger of privately held Cohance Life science with listed Suven Pharma to create the first private equity-led listed contract manufacturing company, making it one of the largest
such homegrown platforms. The
largest in the segment is Divi's
Labs. Both Carlyle and PAG-CX
Partners have similar platforms.
Carlyle bought a 20% stake in Piramal Pharma Solutions, for
23500 crore.
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