Hyderabad-based mid-size drugmaker Vivimed Labs Ltd, has received its board approval to sell a part of its specialty chemical business for at least Rs 380 crore ($57.4 million), according to a stock market disclosure.
The divestment of the business aims to optimise the capital structure of the company and prepare for next leg of growth across its business units, it said.
Vivimed manufactures specialty chemicals and pharmaceuticals. Founded in 1988, the company offers products for oral care, sun care, skin care, hair care, reversacol photochromic dyes, imaging chemicals, nisarg and caters to firmosmetics, nutraceuticals, photochromics, etc.
The specialty chemical business of the firm posted revenues of Rs 446.2 crore for the year ended March 31, 2015 or a third of the company’s turnover. This unit sported over 7 per cent revenue growth last year even as its core healthcare (API and finished formulations) business saw revenue slipping 0.3 per cent.
Vivimed has a market cap of Rs 489 crore.
It is backed by NYLIM Jacob Ballas India and Kitara Capital. The two PE firms had together invested Rs 127 crore in Vivimed Labs in 2011 and currently Jacob Ballas holds 13.13 per cent stake while Kitara has 11.29 per cent.
Last year, Mumbai-based private equity firm Kitara increased its holding in the drugmaker.
In 2013, Vivimed acquired Hyderabad-based Finoso Pharma Pvt Ltd in a cash-cum-stock deal worth Rs 15 crore and also struck a deal to acquire the solid oral dosage (SOD) manufacturing facility owned by the US drug-maker Watson Pharmaceuticals Inc.