Zydus Cadila to sell India animal health business for ~2,921 crore
Cadila Healthcare’s (Zydus Cadila’s) wholly-owned material subsidiary Zydus Animal Health and Investments (ZAHL) is set to sell its animal healthcare business to a consortium led by Multiples Alternate Asset Management for nearly ~3,000 crore.
Zydus Cadila on Wednesday announced ZAHL has entered into a business transfer agreement and other ancillary pacts to sell and transfer its animal healthcare unit to the Multiples-led consortium. The deal is to sell one of the two business undertakings of ZAHL on a slump-sale basis as a going concern, for ~2,921 crore on a cash free and debt free basis, subject to certain closing date adjustments and other conditions.
The transaction involves transfer of immovable assets, movable assets, inventory, brands and intangible assets, contracts, licenses and permissions, business records, employees along with employee benefit funds, insurance policies, other assets and assumed liabilities. While Multiples, along with its consortium partners, will acquire 100 per cent of ZAHL’S unit, the slump sale transaction is subject to closing conditions and receipt of all statutory and other approvals. It is expected to be completed within a period of 90 days.
The Multiples-led consortium, which includes Canada Pension Plan Investment Board and RARE Enterprises, has agreed to purchase the undertaking through a special purpose vehicle (SPV) called Zenex Animal Health India.
Commenting on the deal, Cadila Healthcare Chairman Pankaj Patel said that over the last three decades, ZAHL had grown to become a pioneer and one of the market leaders in the Indian animal health industry.
“With Multiples and its consortium partners committed to growing the business, we are sure that ZAHL will continue to grow and strengthen its position in the industry.”
One of the fastest growing animal health businesses in India, ZAHL claims leadership position across a spectrum of therapeutic and nutritional products for livestock and poultry animal segments, employing roughly 700 people. It has a manufacturing facility in Haridwar. According to Arun Atrey, managing director of ZAHL, the deal is expected to be seamless for the customers, suppliers and other stakeholders, with no disruption in operations.
Multiples Alternate Asset Management Founder and Chief Executive Renuka Ramnath said the consortium will be able to invest in a business that has been helping farmers enhance their productivity and incomes. “I expect Multiples to do many such large transactions in the coming years. We are also delighted to partner CPPIB and RARE Enterprises for our first consortium deal. We look forward to working with them and helping the company unlock its full potential and create value for all stakeholders,” added Ramnath.
RARE Enterprises partner Rakesh Jhunjhunwala said the animal healthcare business segment had “huge growth potential” with the acquired firm having a top quality management team.
“With Multiples and its consortium partners committed to growing the business, we are sure that ZAHL will continue to grow and strengthen its position”
PANKAJ PATEL
Chairman, Cadila Healthcare