Affirma Capital, a private equity firm spun out of Standard Chartered Private Equity earlier this year, is investing in Tirupati Group, a nutraceuticals-focused contract research and manufacturing company.
Affirma will invest $50 million (Rs 345 crore at current exchange rates) to support the organic and inorganic growth initiatives of the company, the private equity firm said in a statement.
The development comes weeks after VCCircle reported that Affirma was looking to invest in the Paonta Sahib, Himachal Pradesh-based Tirupati Medicare Ltd.
Mragank Jain, executive director at Affirma India, said the PE firm is optimistic about the growth prospects of the nutraceuticals and wellness opportunity. The sector is growing rapidly, driven by increasing consumer awareness around preventive healthcare, he said.
Tirupati Group was established in 2005 and has since grown to become a leading value-added contract research and manufacturing company for nutraceutical supplements in India.
The group is led by chairman Dinesh Goyal and managing director Ashok Goyal. It also has other units such as Tirupati Lifesciences and Tirupati Wellness LLP.
Tirupati manufacturers a wide range of nutraceutical products that include protein supplements, ayurvedic supplements, multivitamins, minerals and fortified food and beverages.
These products contribute about 90% to its overall business while pharmaceutical products account for the remaining share. The company has over 200 customers.
The group reported consolidated revenue of around Rs 600 crore for the year through March 2019, up from Rs 520 crore the year before, VCCircle previously reported. Net profit rose to around Rs 40 crore from Rs 32 crore.
Citadel Management Consulting, PwC and Themis were advisers to Tirupati Group. Praxis Global Alliance, Deloitte and J Sagar Associates advised Affirma Capital on this transaction.
The investment in Tirupati Group is Affirma’s second known deal in India ever since StanChart spun out its PE portfolio in December last year as part of a transaction where London-based asset manager Intermediate Capital Group Plc (ICG) acquired the assets for around $1 billion. It had previously invested in StanChart PE portfolio company Northern Arc Capital Ltd.
Ricardo Lombardi, managing director, ICG Strategic Equity, said: “This deal marks the Strategic Equity team’s first transaction in Asia, and is evidence of the scale and global nature of the investment opportunities available in complex private equity secondary transactions."
Affirma has completed its management buyout from Standard Chartered Bank, led by its seven partners. The India business is headed by Udai Dhawan, who was part of the team that led the management buyout. The investment firm has assets under management of $3.6 billion and about $700 million for new investments.
Affirma said that, during the past three years, the private equity team that now constitutes the PE firm deployed over $650 million in 13 companies across its core markets of Asia, Africa and the Middle East. During the same period, the team also clocked $1.2 billion in exit proceeds with capital gains of nearly $500 million.
Affirma Capital’s list of investors constitutes institutional investors, sovereign wealth funds, developmental financial institutions and family offices.