London & Pacific Healthcare Inc., a California-based healthcare advisory company, has acquired Mumbai-based YEN Healthcare Advisors Pvt. Ltd in an all stock deal. The acquisition has been done for an aggregate consideration of one million common shares of London & Pacific Healthcare, which amount to somewhere around $100,000-$150,000.
The management stands to receive a further one million shares after three years subject to an earn out formula, which will be given if the management meets the predetermined milestones, Sunil Shirole, CEO & MD, YEN Healthcare, said. The company is part of Mumbai based boutique investment bank YEN Management Consultants.
London & Pacific, on the other hand, is looking to make private equity investments in healthcare sector in the country through Yen Healthcare. London & Pacific has raised an $80 million Special Purpose Acquisition Company (blank check firm) to invest in the healthcare sector.
“Investment will be made in clinical research institutions, mid-sized pharmaceutical companies, hospitals and allied industries in healthcare,” said Shirole. Shirole has over 20 years of experience managing financial and strategic relationships with major pharmaceutical companies internationally.
SPAC will be used for making acquisitions and will only be looking to acquire majority stakes in the companies. “The model for a SPAC is that it has to be a substantial acquisition, so we would do a minimum of 50-51 per cent acquisition. We would be looking at both listed and unlisted companies,” he added. It is believed that the entire $80 million corpus is to be invested in India.
Yen Healthcare, which is a subsidiary of Yen Consultancy, is involved in corporate and financial advisory services to companies in the pharmaceutical and medical sector. Yen Consultancy provides services such as corporate finance, risk management, real estate and offshore investments.
London & Pacific Healthcare, whose headquarters are in California, with offices in London and Mumbai, is quite bullish on investing in India. “We have a ready pipeline of investments and we expect the investments to take place by first quarter of 2009. By that time we will be ready to raise a subsequent SPAC, essentially from the US investors,” said Shirole.
London & Pacific Healthcare is involved in corporate finance advisory for the healthcare sector. It also specialises in listing companies on international exchanges such as London Stock Exchange’s AIM, Euronext (Amsterdam) and AMEX. It has also recently launched London & Pacific Healthcare Ventures, which provides management and development services to growing companies in the healthcare services sector.