Advent International in talks to buy stake in Laurus Labs

The discussion is for raising funds to the tune of Rs 300 cr. The PE investor is likely to pick a 10-15% stake in Laurus. The proposed capital will be used for Laurus' capacity expansion

US-based private equity (PE) major Advent International is in talks with Hyderabad-based Laurus Labs Private Limited (Laurus) to buy a stake in it.

The discussion is for raising funds to the tune of Rs 300 crore. The PE investor is likely to pick a 10-15 per cent stake in Laurus.

The proposed capital will be used for Laurus’ capacity expansion. Earlier, Chava Satyanarayana, founder and chief executive officer of Laurus, had said the company would set up two new manufacturing facilities to take the total capacity to 1.4 million litres from its current capacity of 800,000 litres.

In February 2012, Fidelity Growth Partners India had invested Rs 200 crore in Laurus, acquiring a minority stake in it. Along with Fidelity, Chava Satyanarayana had also participated in the first round of financing.

A mail sent to Ravi Kumar, executive director (finance), Laurus Labs, did not elicit any response, while Shweta Jalan, managing director, Advent India PE Advisors, did not respond to email queries.

Laurus was set up by Satyanarayana, former chief operating officer of Matrix Laboratories, in 2005. The Rs 800-crore company is a leading manufacturer of active pharmaceutical ingredients (APIs) for anti-retroviral (HIV-AIDS), oncology and nutraceuticals, and a supplier of leading generic pharmaceutical companies in India and abroad. In addition to the API business, the company has a contract research and manufacturing business offering services to a few global pharmaceutical companies.

Laurus has a state-of-the-art research & development and scale-up laboratory in Hyderabad and large-scale manufacturing facilities at Visakhapatnam. These export-oriented units have been accredited by international regulatory agencies including the US FDA, UK MHRA, Australian TGA and Korean FDA.

Advent International has exposure to the Indian health care sector through its $110-million (Rs 560 crore) investment in the Hyderabad-based hospital chain Care Hospitals in April 2012.

The pharmaceutical industry in India is set to witness more deals in 2014 after seeing some of the largest deals in December 2013. According to data from VCCEdge, the pharmaceutical industry has seen eight PE/ VC deals worth $387 million in 2013, against 11 deals worth $151 million in the previous year, a growth of 156 per cent.