Carlyle exits Claris Lifesciences with around 2x in nine years

Private equity investor Carlyle has exited its nine-year-old investment in pharmaceutical firm Claris Lifesciences Ltd by selling its entire 11.29 per cent stake for Rs 170 crore ($27 million) on Monday.

It sold its stake through a secondary market transaction, completing its exit.

Last year, it had part-exited the firm by participating in the company’s buyback offer.

Carlyle, through First Carlyle Ventures III, had invested $20 million (Rs 90 crore then) in Claris Lifesciences in March 2006, through preferential shares. It had stayed put when the company floated its IPO in 2010.

The Ahmedabad-based pharma company raised Rs 300 crore through the public issue. While originally it had fixed the price band at Rs 278-293 per share, it had to cut it down to Rs 228-235 per share and also extend the closing date for the issue after it did not find ready takers for the issue.

Claris made a poor debut, listing 1.6 per cent below issue price.

Carlyle had encashed Rs 24 crore last year in the buyback which also saw a few other PE investors sell shares of the firm. With the latest share sale, it has pocketed a little over 2x in local currency terms while in dollar terms its investment value has appreciated by a modest 65 per cent over a relatively long nine-year period.

In 2012, Claris sold majority stake in its infusion business in India and other emerging markets by forming a three-party joint venture with Japan’s Otsuka Pharmaceuticals Factory and Mitsui & Co. The public-listed pharma company sold 80 per cent in the business for Rs 1,050 crore ($194 million) while retaining 20 per cent stake. At the time of the transaction, the company had said that it will use a part of the amount to buy back shares from the market.

It had used that money for the buyback last year.

Claris Lifesciences stock crashed 11.2 per cent on Monday to close at Rs 274.4 a share on the BSE in a weak Mumbai market.

(Edited by Joby Puthuparampil Johnson)

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