PAG-led consortium to invest $70 mn for controlling stake in Anjan Drug

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Private equity fund PAG is picking up a controlling stake in active pharmaceutical ingredient (API) maker Anjan Drug for over USD 70 million, sources said on Monday.

Earlier in the day, the Asia-focused PE firm said it is partnering with CX Partners and Samara Capital to pick a controlling stake in the Chennai-based Anjan Drug. It, however, did not disclose the deal consideration.

Activity in the API space is attracting attention lately as India tries to veer away from China for its API requirements, and also as the world looks for other options beyond Chinese makers as part of the supply chain shifts.

According to the source, the PAG-led consortium will be paying USD 70-80 million for around 70 per cent stake in Anjan, which was founded by C Kalaichelvan in 1990.

Anjan is a leading supplier of active drug ingredients in the central nervous system therapy segment to some of the world's largest pharmaceutical companies, in markets including the US, Canada, Brazil and Europe, according to a press statement issued by PAG.

The acquisition is part of the PAG-led consortium's strategy to create a best-in-class platform for the development and production of bulk drug ingredients, it said.

The partnership is a key first step in PAG's plan to create the preeminent platform for Indian API, its Managing Director and Head India (Private Equity) Nikhil Srivastava said.

He said Anjan has a strong customer base in some of the world's largest and best-regulated pharmaceuticals markets and maintains the highest-quality manufacturing standards.

"On behalf of the consortium, we look forward to working with Kalaichelvan and the company's management to help them continue on their path to growth," he added.

The PAG-led consortium is moving towards the creation of a platform to tap into the consolidation opportunities in India's high-growth API manufacturing industry, as per the statement.

Srivastava said the Indian API market is an attractive opportunity and well positioned for the future.

PAG is currently investing out of its USD 6 billion PAG Asia III buyout fund and has declared plans to invest up to USD 1 billion in India over the next few years, as per the statement.