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EILSF exits Sutures India with 3.2x returns as CX Partners buys stake for $37M

The fund has few more exits in the pipeline and expects to close at least one more in the next six months.
Sutures India Private Limited

Life Sciences-focused private equity fund EILSF (Evolvence India Life Sciences Fund) has exited Sutures India Private Limited with cash on cash returns of 3.2x on its three-year-old investment, according to a top official. EILSF sold its stake to CX Partners, which recently concluded a transaction to invest $37 million the Bangalore-based firm specialising in the manufacture of surgical consumables.

For EILSF, the most prolific investor in India's life sciences and healthcare sector, this will be its debut exit. And it expects to see more in the coming months. "The fund has few more exits in the pipeline and expects to close at least one more in the next six months," said Vishy Chibrolu of EILSF. EILSF had agreed to invest up to Rs 35 crore in Sutures in September 2009 and deployed the amount in tranches.

Founded in 1992, Bangalore-based Sutures India is a manufacturer of surgical products, offers wound closure products such as natural and synthetic absorbable and non-absorbable sutures, surgical needles, staples, tapes, hernia meshes and disposable surgical gloves. The firm also exports to countries across Europe, South America, Africa and Asia besides sales in the domestic market.

Grant Thornton India acted as the sole financial advisers to Sutures India and its shareholders on the current transaction.

Medical equipment market maturing

The deal comes after medical technology firm Trivitron Healthcare Private Limited raised Rs 400 crore ($75 million) in a round led by Fidelity Growth Partners India (FGPI) last week.

"The medical device/equipment market has started to pick up now and is coming of age. As compared to medical device/equipment industry in India, pharma is ahead with multi-billion dollar global businesses like Dr Reddy's, Sun Pharma, Cipla, Lupin, Ranbaxy, among others," added Chibrolu, adding that he expects to see more companies emerging
from this sector.

EILSF most recently invested $12.5 million in Chennai-based eye care chain Dr. Agarwal's Healthcare. Its investments include Anjan Drugs, one of the largest US-FDA approved manufacturers of drugs for epilepsy and Bangalore-based cancer hospital chain HealthCare Global Enterprises (HCG).

“The Indian medical technology sector is in need of investments to develop technologies relevant for the local market, establish local manufacturing capability and increase market penetration. We see this as a defining transaction for the medical technology sector in India and expect significant additional investments in this space in the coming years," said Mahadevan Narayanamoni, partner and leader of healthcare and life sciences advisory at Grant Thornton.

CX Partners scores second healthcare deal

CX Partners made its first investment in the sector in diagnostics services firm Thyrocare in December 2010, picking up a stake for Rs 188 crore and valuing the firm at around Rs 550 crore. Thyrocare was recently valued at Rs 1,200 crore when it raised funding from Norwest Venture Partner.

CX Partners, a Delhi-based private equity firm founded in 2009 by former Citigroup Venture Capital International India head Ajay Relan, has been a fairly aggressive investor since closing its $515 million debut fund in 2010. Besides Sutures investment, this year it has invested Rs 500 crore for 26 per cent stake in Delhi-based private security firm Security and Intelligent Services (SIS) to buy stake of US hedge fund DE Shaw and infuse fresh capital.

It is also in talks to invest in Transaction Solution International, an independent ATM deployer in India.


Fidelity leads $75M investment in Trivitron; ePlanet, Headland part exit
EILSF invests $12.5M in eye care chain Dr. Agarwal's Healthcare
Norwest Venture Partners buying 10% stake in Thyrocare for $22M

(Edited by Prem Udayabhanu)

(CX Partners, CX Partners Pte. Ltd.)

CX Capital Management Ltd. is a private equity firm with $500 million assets under management. It provides growth capital to companies operating in India. The firm also makes distressed, turnaround, and mezzanine investments. The firm seeks to invest in power, electronics, hotels, telecommunications, consumer products and services, information technology and financial services. The company was founded in 2009 and is based in New Delhi, India.