Monday, November 29, 1999

KKR near Rs 225-cr Emcure investment

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In what would be the second-biggest private equity investment in the Indian life sciences sector in the last 12 months, global PE firm Kohlberg Kravis Roberts & Co (KKR) is close to investing nearly $50 million (around Rs 225 crore) in Pune-based Emcure Pharmaceuticals, said industry sources. The biggest PE deal in the segment recently was New Silk Route's $55 million (Rs 248 crore) investment in Chandigarh-based Nectar Life Sciences this February. The Emcure and Nectar deals signal the recovery of PE investments in the Indian life sciences sector, which had hit a low in FY2009 following the global financial crisis.According to sources, KKR and PE giant Blackstone had been talking to Emcure for some time now, but KKR is the front-runner now. As on December 31, 2009, KKR has $52.2 billion (Rs 2,34,900 crore) in assets under management worldwide.In India, it made two investments in 2009. The first was a follow-on investment in Aricent Inc, a niche technology services company it acquired in 2006. The other was a structured investment in Max India group. Earlier this month, KKR invested Rs 750 crore in a Dalmia Cement (Bharat) Ltd subsidiary. In 2006, Emcure had said that Blackstone invested $50 million in the company, which is said to be the latter's first investment in India after it launched PE operations here.Emcure Pharma officials chose not to respond to queries from this paper. The Rs 600-crore company, founded by Satish Mehta in 1981, is into manufacturing and marketing of formulations, active pharmaceutical ingredients and contract research and manufacturing services (CRAMS). It caters to chronic therapeutic segments like cardiology, nephrology and anti-HIV, and has presence in acute segments such as anti-infective, pain management, dermatology, gynaecology and paediatrics. In FY09, the anti-hypertensive drug Asomex was the company's flagship brand, generating more than Rs 50 crore of revenues, according to a CARE report.>PE investments in the life sciences space in India dipped in FY2009, registering just eight deals totalling $81 million (Rs 365 crore). But FY2010 saw some recovery, with 15 deals at a total value of $145 million (Rs 653 crore), according to Arun Natarajan of research service firm Venture Intelligence. "While PE investments in life science companies are recovering, investors seem to favour domestic consumption or infrastructure-related sectors like microfinance, logistics and education, vis-a-vis export-led sectors," he said.Of the total $2 billion (Rs 9,000 crore) invested by PE firms in Indian companies in the first quarter of FY2011, the pharma and healthcare segment attracted only 7%, amounting to Rs 630 crore. The largest non-life sciences deal during the quarter was the $425 million investment by a clutch of firms like General Atlantic, Morgan Stanley, Norwest, Goldman Sachs and Everstone into power generation firm Asian Genco.

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