Hyderabad-based Vivimed Labs Ltd is raising Rs 127.5 crore from Jacob Ballas Capital and Kitara Capital, with the two private equity firms taking over a 13 per cent stake each in the listed firm. Vivimed Labs, a manufacturer and exporter of specialty chemicals and pharmaceutical products, will use these funds for its overseas acquisitions and expansion plans.
NYLIM Jacob Ballas India Fund, advised by Jacob Ballas Capital, is buying compulsorily convertible and cumulative preference shares (CCPS) for Rs 67 crore. The CCPS, which will carry a fixed dividend of 3.5 per cent per year, will be convertible within 18 months at Rs 315 per share. Dubai-based Kitara Capital is investing through direct equity in the company, picking up 1.85 million shares at Rs 327 each, amounting to Rs 60.5 crore.
The issue is expected to be discussed in Vivimed's EGM on September 7. Vivimed Labs's scrip closed at Rs 266.8 per share on Tuesday, up 8.37 per cent in a strong Mumbai market.
According to sources, Elara Capital was the advisor to Vivimed on the transaction.
While Kitara Capital confirmed the deal, an email sent to Jacob Ballas Capital did not elicit any response till the time of posting the article. Vivimed Labs could not be reached for comments.
Vivimed, led by first generation entrepreneur Santosh Varalwar, is currently setting up new project sites and also investing in a SEZ in Andhra Pradesh. The company has also set up a foreign subsidiary, Vivimed Labs Spain, for acquisitions and is also guaranteeing a Rs 150 crore loan for this unit, as per its recent disclosures.
For the June quarter, Vivimed reported a 42 per cent increase in total income to Rs 120.6 crore with profit increasing 31 per cent to Rs 15.55 crore as compared to the same period last year. For the year ended March, 2011, Vivimed reported 19 per cent increase in consolidated revenues to Rs 416 crore, with the net profit increasing more than 57 per cent to Rs 48.8 crore.
This investment comes after Vivimed raised Rs 34 crore ($7.5 million) through foreign currency convertible bonds (FCCBs) from World Bank arm International Finance Corporation (IFC) in June. Vivimed had earlier said that it was looking to raise up to $50 million through various options such as FCCBs, GDRs, QIP, etc.
Vivimed's expansion plans include ramping up existing sites in Bidar (Karnataka), Bonthapally (Andhra Pradesh) besides greenfield projects in Choutuppal (Andhra Pradesh) and in an SEZ in Srikakulam (Andhra Pradesh). The total investment envisaged for the project is pegged at about $42 million.
Vivimed operates through two divisions: H&PC Actives Division that includes its synthetic organic chemistry products catering to oral care, sun care, skin care, hair care and preservatives besides the Specialty Pharma Division that is into drug delivery and drug discovery focused on providing cures oncology, arthritis, Syndrome X, macular degeneration, psoriasis and stress.
Over the last three years it has struck two overseas acquisitions including UK-based James Robinson Ltd, that is into dyes used in a host of personal care and consumer products ranging from hair dye intermediates and photographic developer chemicals to ophthalmic lenses and fluorescent dyes for textiles, inks and coatings. It also acquired US-based Harmet International to strengthen its base in the American market.