Venture capital firm Sequoia Capital is picking 33.36 per cent stake in Curatio Healthcare (I) Pvt Ltd, a Chennai-based healthcare venture. This would be one among a dozen odd deals by the VC firm in the larger healthcare domain but one among a handful in the products or pharma space.
Set up in 2005, Curatio manufactures prescription-based dermatology products that are sold in India, Sri Lanka and Nepal. It offers solutions in the area of cosmetic and medical dermatology.
It had topline of Rs 62 crore last year and is aiming to clock revenue of Rs 80 crore in the current financial year.
Sequoia is investing Rs 95 crore ($15.8 million) to buy the large minority stake.
The deal, which values Curatio at Rs 285 crore ($46 million), will be completed in two tranches on or before August 2015, it is learnt.
Previous media reports had suggested Sequoia is likely to buy 20-25 per cent stake in Curatio for Rs 100 crore.
VCCircle had first reported that an existing investor Fulcrum Ventures is looking to sell part of its stake in the company with a multi-bagger.
It is not clear how much of the deal value would go into the firm and how much would be through a stake purchase from existing shareholders.
An email sent to Curatio spokesperson on how the firm intends to utilise the money and to Sequoia on who would join the board of Curatio did not immediately elicit a response.
Curatio is run by a team of former executives with American Remedies, which was merged with Dr Reddy's Laboratories around 15 years ago.
It is promoted by S Nagarajan and N Jay Kaushik, who hold roughly 20 per cent stake in the company. Director of sales, Nagarajan has over 25 years of experience in pharmaceutical industry and has worked with American Remedies, Cipla and Dr Reddy's in the past. Kaushik, who is the director of brand building at Curatio, has over 21 years of experience in the healthcare industry.
Its board is chaired by K Ramanathan, a founder director of American Remedies who is also behind early stage investment firm Fulcrum Ventures. The company's managing director is GK Ramani, another ex-American Remedies executive.
Back in 2005, Fulcrum along with a family friend Ramani invested Rs 8.5 crore ($1.41 million) in Curatio to pick up 70 per cent stake. Fulcrum, whose investment is pegged at over Rs 5 crore, owns 40 per cent stake in the company.
Indeed, if Fulcrum has part exited in this transaction, it has struck a multi-bagger.
Sequoia, one of the more active VC firms in the country, has backed over a dozen firms in the healthcare domain.
The bulk of these is in healthcare delivery or services space. Some of the product and pharma companies that it has backed include Celon Labs, Paras Pharma (a maker of FMCG and OTC healthcare products, which was sold to Reckitt Benckiser in 2011) and Koye.
Early this year, Sequoia Capital raised $530 million in its fourth India-focused fund to build on its venture and early growth investment activity in India. This new fund will invest in sectors like technology, consumer and healthcare.
Sequoia has been pretty active and has invested in around half a dozen new firms since January 1 and has put in more money in an equal number of existing portfolio firms in the same period.
Law firm J Sagar Associates (JSA) advised and assisted the promoters of Curatio in this transaction.
(Edited by Joby Puthuparampil Johnson)