Global private equity fund Warburg Pincus has got the approval from the Competition Commission of India (CCI) for its proposed acquisition of a large minority stake in Vishakhapatnam-based drug ingredients maker Laurus Labs.
Warburg Pincus is picking 32.29 per cent stake in Laurus Labs through a mix of primary and secondary components. It is subscribing to compulsorily convertible preference shares of Laurus besides acquiring fully paid-up equity shares/preference shares from certain existing shareholders, as per the filing made to CCI.
The firm did not name the sellers but it is believed to be Fidelity Growth Partners which had invested in the firm just two years ago. It is not clear if Fidelity is part or fully exiting.
Warburg Pincus is investing through Bluewater Investment Ltd, a Mauritius-based holding company.
Laurus is primarily engaged in research, development and manufacture of active pharmaceutical ingredients (APIs). It is engaged in research, development and manufacture of specialty chemicals, intermediate products, nutraceuticals and contract research services.
Over 90 per cent of the turnover of Laurus is from the sales of APIs that are exported to formulators in other countries or sold to formulators within India who in turn export the products to other countries.
The deal between Warburg Pincus and Laurus was struck two months ago and has been awaiting clearances for final execution.
For Warburg Pincus, this would the third ever healthcare sector deal in the country and the first in the pharma space. It had earlier invested and later exited hospital operator Max Healthcare and counts diagnostics chain Metropolis as a portfolio firm.
This is also the first new portfolio firm for the PE firm which has otherwise put more money in its existing portfolio firms since January this year.
(Edited by Joby Puthuparampil Johnson)