Privately held mid-size pharma company Symbiotec Pharmalab Ltd is in talks with Franklin Templeton Private Equity, Kotak Private Equity and New Enterprise Associates for fundraising. However, Franklin Templeton PE seems to be emerging as the frontrunner for the deal, sources with direct knowledge of the development told VCCircle.
“The due diligence is currently on and the deal is expected to be concluded by the first week of September,” said a source on condition of anonymity.
An e-mail query sent to Deepa Sankaran, managing director, Darby Asia Investors India Ltd (advisors to the private equity portfolio managed by Franklin Templeton India) did not elicit any response till the time of writing this article. Another e-mail message sent to Symbiotec Pharmalab spokesperson also remained unanswered.
Indore-based Symbiotec Pharmalab is in the business of development, production and marketing of research-based corticosteroid and hormone APIs. Currently, the company has two manufacturing facilities based out of Indore.
Ace investor Rakesh Jhunjhunwala was one of the early investors in the pharma company. In 2007, Jhunjhunwala acquired around 0.52 million shares at a price of Rs 143.68 per scrip and also upped his holding in the company by acquiring 0.2 million shares in July, 2009. His total investment through the two tranches is pegged at Rs 7.9 crore.
If this deal materialises, it will be the fourth deal for Franklin Templeton in the last four months. The PE firm houses a Rs 630 crore private equity fund, advised by Darby Asia Investors (India) Pvt Ltd.
In June this year, the PE firm announced Rs 60 crore investment in Mumbai-based Kimaya Fashions Pvt Ltd, a luxury fashion house specialising in ethnic wear for women. The fund had also invested Rs 67.5 crore in SFO Technologies Pvt Ltd in May and funded Chennai-based publishing services provider Newgen Knowledge Works in July.
The highly fragmented pharmaceutical industry in India has a large potential for attracting private equity investments and future consolidation. While large firms have been gobbled up by multinational companies, opportunities lie in small and midsize space.
Private equity firms are looking at funding both greenfield and brownfield expansions by firms in the pharma sector. The Indian pharmaceutical market is also expected to touch $40 billion (Rs 1.8 lakh crore) by 2015, predicts the global management consulting major McKinsey & Co.