KKR investing $200M in Gland Pharma, Evolvence to exit

By TEAM VCC

  • 28 Nov 2013

Private equity major KKR is picking up a minority stake in Gland Pharma Ltd, a pure-play generic injectable pharmaceutical products company, for $200 million, in what would be the biggest PE deal as yet in Indian healthcare sector.

The deal includes a primary investment and secondary purchase which will give the Hyderabad-based company's initial private equity investor Evolvence India Life Sciences Fund (EILSF) an exit.

Vetter family, the promoters Germany-based Vetter Pharma, are also investors in privately held Gland Pharma.

The investment is by far the largest private equity deal in the healthcare sector to date. In the pharmaceutical sector in particular it comes ahead of Temasek and TPG Capital's $74 million in Matrix Labs (acquired by Mylan) in 2004 and ChrysCapital's $56 million infusion in Intas Pharmaceuticals last year, according to VCCedge, the data research platform of VCCircle.

The deal is the second major transaction for KKR in India this year after it closed its second Asian fund at $6 billion. In April, the firm acquired a controlling stake in the Alliance Tire Group (ATG) from Warburg Pincus in a deal valued at $650 million.

Established in 1978, Gland Pharma develops and manufactures generic injectables primarily for the US market besides for India and other semi-regulated markets. In 2003, Gland Pharma was the first company in India to get US Food and Drug Administration (FDA) approval for pharmaceutical liquid injectable products.

Gland Pharma claims to have pioneered pre-filled syringe technology in India and exports products in this format to the US market. Having pioneered Heparin technology in India, Gland Pharma has a strong position in the US market for that product through its marketing partner.

“Gland Pharma is at an important juncture in its evolution where we have proven our sterile manufacturing capabilities, established ourselves as a high-quality manufacturer of complicated injectables products and achieved a track-record of strong financial performance. Our partnership with KKR will help us in our next phase of growth as we look to expand our manufacturing capacities and invest more in our development work with the goal of expanding our product registrations," said Gland Pharma founder-chairman PVN Raju.

“Gland Pharma has a track record of strong financial performance as well as long-standing relationships with Indian and international pharmaceutical companies and we believe there is significant potential for it to grow these partnerships even further. We are excited to invest behind a high-quality promoter family and management team led by Dr Ravi,” said KKR India chief executive Sanjay Nayar.

(Edited by Joby Puthuparampil Johnson)