Announcement / Companies & Industry November 07, 2006
Mumbai, November 3, 2006: India Advantage Fund-VI, a fund managed by ICICI Venture funds Management company, of over US$ 2 billion, has increased its stake in Arch Pharmalabs, a company promoted by Ajit Kamath, Manoj Jain, Rajendra Kaimal to 31%. The Rs 260 cr company, over the last three years, has recorded a stellar performance registering a CAGR of 50% over a period of three years. This is the second round of investment by ICICI Venture, which currently has an existing stake in the company through a mezzanine transaction from its previous fund. The proceeds of this investment would be used for both organic as well as inorganic growth opportunities in the manufacturing and services side.
According to Renuka Ramnath, CEO & MD of ICICI Venture "We believe that Arch Pharmalab will continue to grow rapidly in the CRAMS segment and become a dominant player. The company has built a very competent management team who have shown the ability to identify, pursue and successfully execute opportunities." The company in recent years has acquired and effectively integrated three other companies. The company has also secured long-term funding from DEG to fund its organic growth plans. IL&FS Investment Managers and Swiss Technology Venture Fund are the two other private equity investors who have existing investments in the company.
Arch is one of India's largest pure play intermediate player engaged in the manufacturing of pharmaceutical intermediates and APIs. It is a world leader in the Isoxazole Penicillins side chains market and the sole supplier to offer intermediates for the entire basket of semi-synthetic penicillins (SSPs) in the Isoxazole Penicillins range. The company's non-compete strategy has made it a partner of choice for both custom synthesis and contract manufacturing opportunities. The company is currently focusing on expanding its Full Time Equivalence (FTE) business on the services side and Contract Manufacturing Operations for global companies on the manufacturing side.
Arch has embarked on an ambitious expansion plan at its Gurgaon site to quadruple its existing capacity. As part of this, the company is setting up manufacturing facilities for high potency compounds in the Oncology segment. By using cutting-edge biocatalysis technology from a leading U.S. based Biotech Company, Arch has also been able to scale a key intermediate for a high volume compound with dual benefits of cost competitiveness and promise of green & clean chemistry. It is now in the process of expanding the use of this technology for the manufacture of other compounds. The company is expecting its first USFDA inspection in the second half of 2007.
The pharmaceutical industry in India is expected to grow to US$ 9.4 bn by 2010. India is currently among the top five pharmaceutical manufacturers in the world. Arch is well placed to take advantage of this opportunity. It is successfully moving up the value chain and has enhanced its product portfolio beyond penicillin. According to Ajit Kamath, CEO of Arch Pharmalabs "With the current business profile and the potential contracts which encompass manufacturing, services and co-marketing alliances with Indian producers, Arch is poised to cross the Rs.500 crore mark within the next two years."
Besides Arch Pharmalabs, ICICI Venture has made significant investments in other Life Sciences companies including Avesthagen, Metropolis, Malladi and Perlecan Pharma (In partnership with Dr. Reddy's laboratories)
About ICICI Venture Funds Management Ltd
ICICI Venture, incorporated in 1988, as a wholly owned subsidiary of ICICI Bank, is the largest and one of the most successful private equity and venture capital management companies in India with funds currently under management in excess of Rs.9000 crores (USD $ 2 billion).Over the last 18 years, ICICI Venture has been successful in identifying trends well ahead of the curve; be it retail, media and entertainment, information technology, real estate or pharmaceuticals and biotechnology. ICICI Venture today has some of the best known and managed companies in India in its portfolio delivering value consistently to its investors.
ICICI Venture Funds ups Arch Pharma stake to 31%
Announcement / Companies & Industry Nov 07, 2006, 22:48 IST
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