Piramal sells DRG business to Clarivate Analytics for $950 mn

Ajay Piramal-led Piramal Enterprises has signed an agreement for sale of its Decision Resources Group (DRG) business to US-headquartered Clarivate Analytics for USD 950 million (over Rs 6,745 crore), and will use the money to reduce debt and to explore organic and inorganic growth opportunities.

The transaction is expected to be completed by the end of February 2020, Piramal Enterprises Limited (PEL) said.

PEL DRG Dutch HoldCo BV, a 100 per cent subsidiary of PEL and the holding company for DRG, has signed a definitive agreement for sale of DRG to Clarivate Analytics for a consideration of USD 950 million, it added.

This includes USD 900 million on closing and USD 50 million to be received at the end of 12 months from the date of closing, PEL said.

On being asked about how the company plans to use the sale proceed, Piramal Group Chairman Ajay Piramal told PTI that it would be used to reduce debt and to explore organic and inorganic growth opportunities.

We will use it to reduce debt and also to grow our existing businesses as well as look at some inorganic opportunities, he added.

As a company, "we have always believed that we should do what is in the best interest of shareholders and therefore if we feel the value that we can get by selling the business is good, we do it," Piramal said.

PEL had initially invested USD 650 million in 2012 to acquire DRG, out of which USD 260 million was infused as equity. It has realised 2.3 times its initial equity investment in rupee terms, the statement added.

"We are pleased to have grown DRG's market leadership over the last few years and believe that through this combination, Clarivate, with its size and scale, is well positioned to further accelerate DRG's growth potential."