Samara Capital Management Ltd has invested close to Rs 170 crore ($25 million) in stent maker Sahajanand Medical Technologies Pvt Ltd, as the mid-market private equity firm seeks to deploy the remaining corpus of its second fund and start raising a new fund.
The development was reported by The Economic Times citing both the parties from the management confirming the deal, but not the deal value and stake holding.
Mails sent to Samara Capital and Sahajanand Medical Technologies did not elicit a response till the time of filing this article.
Sahajanand Medical Technologies’ chief executive Ganesh Sabat said in the report that the Gujarat-based company plans to use a major portion of the funds on research and development to expand its product line in the cardiovascular segment.
The firm’s manufactures minimally invasive coronary stent systems including drug eluting stents, bare metal stents, balloon catheters and inflation devices, according to its website. It has footprints in more than 40 countries.
The company reported net sales of Rs 61 crore in the fiscal year ended March 31, 2015 against Rs 48.4 crore in the previous fiscal year. It reported net profit of Rs 3.13 crore during the period as compared to Rs 1.78 crore in the corresponding period, according to VCCEdge, the data and research platform of News Corp VCCircle.
Sahajanand Medical Technologies operates in a highly fragmented medical devices market that depends significantly on imports. According to Espicom Business Intelligence, a research firm for the healthcare industry, the size of India's medical devices market was $3.4 billion in 2014 and it is estimated to grow at a compound annual rate of 7.3% to $4.8 billion in 2019.
There have been at least two major investments in the medical devices and consumables space this year. In March, healthcare-focused private equity fund India Life Sciences Fund II, which is advised by its investment manager InvAscent India, invested Rs 50 crore ($7.42 million) in medical devices maker Biorad Medisys Pvt Ltd. Later in July, VCCircle reported that TPG Growth, the mid-market and growth-equity investment platform of alternative investments giant TPG Capital, bought out majority stake in Noida-based surgical suture needles manufacturer Quality Needles Pvt Ltd.
Notably, this is Samara Capital's second investment in the medical devices and consumables sector after its deal in Mumbai-based surgical consumables platform Lotus Surgicals in 2013.
Last month, VCCircle reported that Samara Capital is looking to invest the balance amount of its second fund across seven-eight firms as it goes about courting limited partners (LPs) for a third fund.
The PE firm, co-founded by former top Citigroup India executives Sumeet Narang and Gautam Gode, is currently sitting on a dry powder of around $150 million from its second fund through which it has backed six companies. The portfolio firms from the second fund, Samara Capital Partners Fund II Ltd, include drug maker Adcock Ingram Holdings, Gurgaon-based Guardian Lifecare, Thriveni Earthmovers (contract mining company) and Sapphire Foods India Pvt. Ltd (franchisee of several KFC and Pizza Hut outlets in India) and outsourcing company Iron Mountain India.
The PE firm’s first fund, launched in 2007, had originally planned to raise $125 million for which it had received early commitments of $65 million but later it raised the target corpus to $300 million and had raised at least $263 million, SEC filings by the company show.
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