Funds advised by Convergent Finance, a private equity firm floated by former Fairfax India executive Harsha Raghavan, will acquire 43.7% stake in bulk drugs and formulations maker Jagsonpal Pharmaceuticals Ltd for Rs 269 crore ($36 million).
This is the first bet where Convergent Funds, the funds managed by Infinity Investment Management and advised by Convergent Finance, will get controlling stake in any firm.
The funds will buy the shares at Rs 235 apiece, said Jagsonpal Pharmaceuticals in a stock market disclosure. The company's shares on Monday closed at Rs 204.65 apiece.
The proposed transaction will trigger a mandatory open offer for an additional 26%, it added.
The transaction as well as the open offer is expected to be completed by June this year.
Jagsonpal Pharmaceuticals, which has been publicly traded since 1986, was founded in 1964 by Jagmohan Singh Kochhar. Its products are primarily focused on women’s health and orthopedics.
"Going forward, while the Convergent Funds will work extensively with company management in building the business, we will support the business with our legacy knowledge, pharmaceutical expertise, and industry connects," said Rajpal Singh Kochhar, Chairman and Managing Director, Jagsonpal Pharmaceuticals, in the disclosure.
Harsha Raghavan, Managing Partner at Convergent, noted in the statement that women’s health is a critical issue for the country and the pharmaceuticals company plays an important role in making its products accessible to the masses.
The company has a robust distribution network and large field force of medical representatives, he added.
Convergent Finance was floated by Raghavan – a Stanford alumnus – after he quit as the India head of Fairfax’s private equity wing, Fairbridge Capital Pvt. Ltd, in May 2018.
In December that year, VCCircle had reported that Raghavan’s new investment firm was looking to raise as much as $500 million (Rs 3,515 crore then) under its maiden fund – a near-record sum for someone breaking out on their own.
Its investments include speciality chemicals maker Camlin Fine Sciences Ltd, Jyoti International Foods Pvt. Ltd, a supply chain solutions provider for the food services industry, and Hindustan Foods Ltd, a contract manufacturer for PepsiCo’s Kurkure brand of snacks.
In December last year, Convergent Finance completely exited its investment in publicly-listed life sciences company SeQuent Scientific.