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Former PE exec’s blank cheque firm raises $125 mn to bet on Indian healthcare

21 June, 2017

Constellation Alpha Capital, a special purpose acquisition vehicle led by former ICICI Venture executive Rajiv Shukla, has raised $125 million (Rs 800 crore) on the Nasdaq stock exchange to invest primarily in Indian healthcare and manufacturing companies, a regulatory filing shows.

A special purpose acquisition vehicle, also known as a blank cheque company, is a development-stage company with a business plan to engage in a merger or acquisition with an unidentified company or companies.

The company has also given underwriters a 45-day option to purchase up to 1.87 million units in addition to the 12.5 million units that have been issued. The subscription of additional units will take the issue size to $144 million.

Constellation Alpha, which is incorporated in the British Virgin Islands, aims to focus on healthcare services and manufacturing businesses in India although it is not limited to a particular industry or region for purposes of acquisitions or mergers, the filing said.

“Our management team believes that the Indian healthcare sector provides robust exposure to India’s domestic economic growth without the volatility associated with sectors driven by commodity prices and monetary policy,” the filing said. It added that there are substantial investment opportunities in India’s hospital, pharmaceuticals and medical devices sectors.

Investment banking firm Cowen and Company, LLC is acting as the sole book-running manager of this offering and as a representative of the underwriter.

Shukla, who is the chairman and CEO at Constellation Alpha, has worked in India, the US and the UK. Prior to starting Constellation Alpha, Shukla served as CEO of Reliance Defence and Engineering Ltd, formerly Pipavav Defence & Offshore Engineering Company.

Between 2008 and 2013, he worked as an investor at private equity firm ICICI Venture, Morgan Stanley Investment Management and Citi Venture Capital International. He has been involved with over 40 investments in healthcare companies across India, China, Brazil, Thailand, the US and the UK.

Shukla graduated from Harvard University with a master’s degree in healthcare management and a bachelor’s degree in pharmaceutics from the Indian Institute of Technology, Varanasi.

Other members of the team include Kewal Handa, former Pfizer India CEO; Alan Rosling, former chairman of Jardine Matheson Group India and former executive director on the board of Tata Sons; and Craig Pollak, former head of global marketing at equity value fund Ivory Investment Management.

Constellation Alpha Capital joins a small number of Indian companies listed on the Nasdaq.

In July last year, online travel agency Yatra entered into a reverse merger agreement with US-based special purpose acquisition company. This paved the way for a back-door listing of the second Indian online travel agency in the US.

In 2015, direct-to-home broadcast services provider Videocon d2h had signed a similar $375 million deal with a US-based blank cheque company. In the process, it opted out of a planned IPO in India and went public on Nasdaq.

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Former PE exec’s blank cheque firm raises $125 mn to bet on Indian healthcare

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