Carlyle in talks for Bharat Serums stake

Private equity major to buy out Kotak, OrbiMed

The Carlyle Group, one of world's largest private equity investors, is in talks to buy a significant minority stake in Bharat Serums and Vaccines from existing investors for Rs 500-600 crore.

Carlyle is in discussion to buy the 15 per cent stake held by Kotak Mahindra's private equity arm as well as another 8-10 per cent held by OrbiMed Advisors, the world's leading healthcare-dedicated investment firm.

According to sources in the know, Carlyle is likely to buy about 25-30 per cent stake in Bharat Serums and Vaccines for Rs 500-600 crore. It is not clear whether the promoters will dilute their stake in this round of fundraising.

Founded in 1971 by the Daftari family, the Mumbai-based Bharat Serums and Vaccines is among the country's leading biopharmaceutical companies. Its 900 employees produce 25 brands in plasma derivatives, monoclonals, fertility hormones and cardiovascular drugs. Bharat Serums and Vaccines earned Rs 390 crore revenue in 2012-13, a 30 per cent growth over the previous financial year.

The company's board includes Nitin Deshmukh, CEO, Private Equity, at Kotak Investment Advisors, and Sunny Sharma, senior managing director on the Asia team of OrbiMed Advisors.

"As company policy, Carlyle does not comment on market speculation," a Carlyle spokesperson said. Mails to Gautam Daftary, vice-chairman and managing director of Bharat Serums and Vaccines and Deshmukh of Kotak Investment Advisors went unanswered.

The Carlyle Group, which has $199 billion of assets under management across 120 funds, has invested and committed approximately $1.1 billion in India. If this deal materialises, this would be Carlyle's third investment in Indian healthcare after Medanta Medicity and Claris Lifesciences.

In a similar transaction in December 2013, Carlyle had bought the 28 per cent held by Avenue Capital Group in Naresh Trehan's super-specialty hospital Medanta Medicity. Neeraj Bharadwaj, who joined as managing director of Carlyle Asia Buyout Fund in India in 2012, is steering investments in healthcare.

According to a 2012 report by Global Business Intelligence (GBI) Research, India's vaccine industry is likely to reach $871 million by 2016. In 2011, it was estimated to be $350 million. India exports 70 per cent of its vaccines and is the major supplier to UNICEF that provides vaccination in more than 140 countries.

CARLYLE STORY

Rs 500 cr Deal size in which Carlyle is likely to buy stake from existing PE investors in Bharat Serums and Vaccines, say sources

25-30% Per cent of stake Carlyle is likely to buy in BSV

900 Employee strength at BSV, that runs a product portfolio comprising 25 brands in areas of plasma derivatives, monoclonals, fertility hormones and cardiovascular drugs

Rs 390 cr Revenue of BSV in FY13, 30% growth over the previous financial year

$199 bn Assets under management across 120 funds that Carlyle group handles

$1.1 bn Funds that Carlyle has invested and committed in India