Advent International takes control of Bharat Serums

MUMBAI: US private equity (PE) firm Advent International Corp. on Monday said it has acquired a controlling stake in Bharat Serums and Vaccines Ltd, a leading maker of injectable biological and pharmaceutical products. The company operates in women’s healthcare, assisted reproductive treatment, critical care and emergency medicine in India and emerging markets.

While financial details of the deal were not disclosed, Mint had reported first on 9 April that promoters of Bharat Serums were in initial talks with PE firms to sell a controlling stake for around $500 million, and had approached Advent for the same.

Monday’s deal provides a complete exit to the company’s existing investors—pe firms Orbimed Advisors Llc and Kotak PE. The Daftary family, the promoters of the company, will continue to hold a “meaningful stake”, a company statement said, without elaborating.

The company, which has three manufacturing plants in Maharashtra, has its products registered in more than 45 countries. It employs around 1,000 people across locations in India and overseas. Its efforts on new drug discovery and research and development (R&D) in the past few years have met with limited success. It had also formed a joint venture (JV) with drug maker Zydus Cadila to develop cancer drugs. However, the JV ended in 2015 after Zydus Cadila bought over Bharat Serums’ stake in the business.

Bharat Serums competes with Serum Institute of India, which is controlled by the Poonawalla family and is one of the world’s largest manufacturers of vaccines.

The transaction indicates the rising interest of PE funds to undertake control deals in India to ensure that they can drive decisions, strategy and corporate governance in their portfolio companies. At the same time, Indian promoters have also become more willing to cede control to a financial partner to boost growth.

When Kotak PE invested in the company in 2012, it had a revenue of just ₹80 crore ($12 million), which increased to around ₹700 crore ($100 million) in FY19. However, the second generation of the family is not too keen to run the business and have been wanting to exit it altogether.

The company has seen a number of PE suitors over the years, including The Carlyle Group, US drug maker Mylan Inc., Baring Private Equity, as well as domestic pharmaceutical company Cadila Healthcare.