US-based Avantor Performance Materials Holdings, earlier known as Mallinckrodt Baker, is acquiring RFCL Limited in what would mark an exit for ICICI Venture Funds Management Co Ltd. Avantor, which was acquired by New York-based private equity firm New Mountain Capital in August, is involved in manufacturing and marketing high-performance chemistries and materials. RFCL has around $50 million in annual sales.
The deal size was not disclosed, but a report in Business Standard puts the acquisition at Rs 500 crore. The deal comes after the PE arm of ICICI Bank sold RFCL’s animal health unit, Vetnex, to Pfizer Animal Health for $75 million (Rs 335 crore) last year. The deal would help $430 million Avantor to build on its current presence in the laboratory and pharmaceutical markets in India.
Interestingly, ICICI Venture had reportedly explored the acquisition of Mallinckrodt Baker to scale up RFCL a little more than two years ago but the deal was called off.
New Delhi-based RFCL, earlier known as Ranbaxy Fine Chemicals Ltd, is a maker of laboratory reagents and consumables as well as products for the medical diagnostics market. Through its Rankem division, RFCL offers over 20,000 different laboratory products to more than 5,000
customers across a variety of industries including pharmaceuticals, biotech, research organizations and educational institutions.
RFCL's Diagnova division offers approximately 2,000 products used by over 6,000 customers primarily in the Indian in vitro diagnostics, medical devices and life science research markets, which cater to hospitals, pathology laboratories and blood banks.
ICICI Venture had acquired RFCL for Rs 100-125 crore back in 2005 and the company has grown since then through organic and inorganic route. RFCL acquired companies like Wipro Biomed and Godrej Medical Diagnostics in the diagnostics space over the years.
Besides ICICI Venture, other shareholdres in RFCLinclude the managers and private equity firm GLG Partners, which invested $20 million in 2007.
"We believe that the combined Avantor and RFCL business will be positioned as a leading player in the laboratory, pharmaceutical, electronic materials and diagnostics industries in India," said Raj
Gupta, Chairman of Avantor and a Senior Advisor to New Mountain Capital. "We look forward to working with the RFCL leadership team to capture the full potential from this combination."
Matt Holt, Director at New Mountain Capital, said, "New Mountain believes that the acquisition of RFCL represents a significant step forward to expand Avantor's global presence in important geographies and end markets, and we look forward to supporting the management teams as they continue to build the combined business."
Lazard India Private Limited acted as the sole financial advisor to Avantor and New Mountain Capital. Fried, Frank, Harris, Shriver & Jacobson LLP and AZB & Partners acted as legal advisors to Avantor and New Mountain Capital.
N M Rothschild and Sons (India) Private Limited acted as the sole financial advisor to ICICI Venture for this transaction. Hemant Sahai Associates acted as sole legal advisor to ICICI Venture and RFCL Limited.