Private equity firm Everstone Capital has agreed to exit drug delivery technology company Rubicon Research by selling its controlling stake to US-based PE firm General Atlantic.
With this exit, Everstone will receive a multiple on invested capital of 4.5 and a 92% internal rate of return in a span of three years, it said in a statement.
This indicates a payout of at least $148 million for Everstone Capital. Typically, PE firms investing in India promise Limited Partners an IRR of around 20-30% in rupee terms.
The firm did not reveal the exact deal size, but an Economic Times report earlier in the day said that General Atlantic is expected to pay $220 million for the controlling stake.
The PE firm had acquired a 70% stake for Rs 200 crore ($33 million then) in the Mumbai-based company in 2016 from its Everstone Capital Partners III fund.
The firm’s managing directors Dr Arjun Oberoi and Puncham Mukim, who were on the company’s board, helped Rubicon in molecule identification, overall strategy and with scaling of the company’s manufacturing network, the statement added.
Sameer Sain, the co-founder and CEO of the Everstone Group, said in the statement that this investment was an example of how a strong relationship and team work between internal and external stakeholders could produce exceptional outcomes.
Founded in 2000, Rubicon acts as an outsourcing partner for global pharmaceutical firms and provides solutions for bioavailability enhancement, gastric retention, taste masking, and customising the release profiles of drugs. The company also offers lifecycle management services for pharmaceutical products. It makes speciality and branded generics products as well as over-the-counter products.
At the end of March 2018, the company reported a total income of Rs 69.4 crore with an EBITDA of Rs 9.43 crore and net profit of about Rs 95.3 lakh. In the financial year 2015-16, the firm reported a net profit of Rs 91 lakh on net sales of Rs 39.64 crore, according to VCCircle’s research arm VCCEdge based on the company's filings with the Registrar of Companies.
The PE firm, which was founded in 2006, has about $5 billion in assets under management in private equity and real estate investments.
It has offices in Singapore, Mumbai, Delhi, Bengaluru, Mauritius, New York and London.
The private equity firm had announced the final close of its third sector-agnostic but consumer-themed fund— Everstone Capital Partners III LP—at $730 million in September 2015.
Since then, it has invested in other pharmaceuticals and healthcare companies like nutraceuticals ingredients company OmniActive Health Technologies Ltd and pharmaceutical distribution platform Ascent Health and Wellness.
In 2015, it had exited large multi-specialty tertiary hospital chain Global Hospitals.
In November 2017, it formed a healthcare platform EverLife.
In March this year, EverLife struck its first deal in India by investing an undisclosed sum in in-vitro diagnostics (IVD) products manufacturer CPC Diagnostics Pvt. Ltd.
To expand its fundraising efforts globally, the firm opened an office in New York in 2018 and was hiring personnel at that time.