Rallis India, a subsidiary of Tata Chemicals, is picking up a 53.5% in Bangalore-based seed company Metahelix Life Sciences Pvt Ltd for Rs 99.5 crore. Metahelix, backed by Infosys co-founder Nadathur S. Raghvan's fund Nadhathur Holdings and Kotak Private Equity, will also get a fresh infusion of Rs 25 crore which will raise Rallis stake in the firm to 59.02%. Metahelix is a bio-technology firm focused on developing traits and technologies for crop protection and improved productivity.
The transaction is an all-cash deal and will be funded through internal accruals, with Rallis having the option to buy 100% stake over the next five years. The deal also includes Dhanya Seeds, which sells Metahelix products through more than 1,000 distributors and 120 sales executives and agronomists.
The deal would mark a near exit for Nadathur Holdings and Investments, which has invested a total of $5-$6 million in the firm for a stake north of 40%. According to sources familiar with the development, Nadathur will be walking home with returns of 3x on its investments made from 2001 onwards. Nadathur Holdings still has some residual stake, post the deal, which will be sold over the next year.
Kotak Private Equity is also an investor which picked up a stake in 2006, but it could not be ascertained if the PE firm has exited. VCCircle reported earlier this year that Kotak was looking to offload stake in Metahelix.
Metahelix has a portfolio of seeds that have been successfully commercialized over the last three years in areas like rice, maize, millets, vegetable seeds. It has a team of 50 scientists with R&D facilities in Bangalore, Hyderabad and Ahmedabad. Metahelix is the first Indian company to have properiety Bt trait, cry1 approved in cotton.
Rallis has identified seeds as one of its major growth areas and plans to offer the entire suite of agri-inputs for the farmer community. Metahelix Life Sciences is the company's first inorganic foray in the seeds space providing a strong platform in the entire value chain that comprises breeding, production and marketing of seeds, it said in a release.
Rallis reported revenues of Rs 933 crore with a net profit of Rs 101 crore in FY10. The share price of the company fell by over 2% to Rs 1,282.90 at the close of market on Thursday.
Metahelix founders include Dr. K K Narayanan and Dr. Gautham Nadig, both of whom earlier worked at Monsanto Research Center, Bangalore.