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Citigroup VC Prunes Holding In Jubilant Organosys

By Pallavi S

  • 15 Apr 2010

Citigroup Venture Capital (CVC) is slowly part-exiting from its five-and-half-year-old investment in drug and chemical makers Jubilant Organosys with a 2x return. Jubilant is also backed by others such as Henderson Capital and General Atlantic.

CVC had invested along with Henderson in December 2004 through a preferential allotment. It had picked around 5% for Rs 110 crore. After the stock split, its average cost of acquisition works out to Rs 165 a piece.

On Tuesday, CVC sold a fifth of its holding at Rs 334.77, almost double that of its initial purchase cost. Incidentally, CVC had also sold some shares in September-December’09 quarter when prices were in the region of Rs 220-350 and it could have also sold around with the same returns after completing five years of investment period.

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CVC has encashed around Rs 50 crore. Its remaining stake of around 3.5% is valued at Rs 177 crore.

Jubilant, that raised Rs 387 crore through a qualified institutional placement two weeks back, has been on the inorganic expansion path between 2005-08. It acquired US contract research organization Target Research Associates in 2005, and thereafter in quick succession also picked a majority stake in Belgium's Pharmaceutical Services Inc and US generic company Trigen Laboratories.

In 2007, it acquired Hollister-Stier for $122.5 and went a step ahead by acquiring Canada’s Draxis Health for $255 million in April 2008.

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