Sector-focused private equity fund Evolvence India Life Sciences Fund has backed the recently concluded acquisition of Uquifa by Hyderabad-based Vivimed Labs, providing acquisition financing of $12.5 million. The deal is one of the rare private equity-backed overseas acquisitions in India and one of the first-known such deal in the pharmaceutical space.
“Evolvence India Life Sciences Fund (EILSF) has provided $12.5 million in acquisition finance to Vivimed Labs to acquire the Active Pharmaceutical Ingredients (API) business of Uquifa, a European company with manufacturing facilities in Spain and Mexico,” it said in a statement.
EILSF will invest $12.5 million in equity to fund the acquisition, which has been routed through a special purpose vehicle (SPV). Although the exact structure of the transaction was not disclosed, EILSF’s investment will not be in the listed parent company.
An EILSF spokesperson has said that although the fund does not invest in listed companies or PIPE transactions, there are quality life sciences companies on the exchanges. Through such a deal structure, EILSF is able to tap the growth of companies like Vivimed, without investing and subjecting itself to volatility of the markets.
Vivimed has acquired Uquifa for $55 million, which includes equity infusion of $20 million (Rs 103 crore), debt financing of $25 million (Rs 129 crore) and the rest $10 million (Rs 51.7 crore) by way of deferred payment.
“Uquifa has an impressive product portfolio and a marquee customer base, consisting of both innovator companies and generic majors. It manufactures products at its three USFDA-approved facilities. The acquisition is testimony to the emergence of Indian pharmaceutical companies as global leaders in the manufacture and supply of high-quality, low-cost medicines for the world. Vivimed, a supplier of pharmaceutical and specialty chemical products with its strong operating capabilities and track record of acquiring and integrating businesses, is a natural owner of Uquifa’s assets,” added the EILSF statement.
Uquifa’s gross revenues are expected to reach €79.4 million, with EBITDA at €11.9 million in 2011. The company has net assets of $65 million and gross assets of $100 million as of June 2011. The acquisition is EPS accretive.
The deal with Uquifa will help Vivimed in backward integration, helping enhance its pharma formulations business, along with API deliverables. It will also help globalise the existing pharma business and enable the company to leverage customer relationships for expanding FDF opportunities.
For Evolvence India Life Sciences Fund, focused on investing in the healthcare and life sciences space, this is the seventh investment. However, one of its transactions remains undisclosed.
In December last year, EILSF acquired 21.05 per cent stake in Fermenta Biotech Ltd for Rs 40 crore. Thane-based Fermenta specialises in biotechnology, pharmaceuticals and environmental solutions. Prior to that, EILSF had invested Rs 35 crore in Sutures India Pvt Ltd, a maker of surgical consumables. It also made an investment of Rs 25 crore in Chennai-based Anjan Drugs, one of the largest US-FDA-approved manufacturers of medicines for epilepsy. Its other two deals are in advanced drug delivery mechanism company Gland Pharma and cancer services network Health Care Global.