ICICI Ven cashes out of RFCL in Rs 500-crore deal

Leading Indian private equity fund ICICI Venture is exiting Ranbaxy Fine Chemicals, a company it bought five years ago and renamed RFCL. ICICI Venture has sold around 90 per cent of its holding to US chemicals company Avantor Performance Materials Holdings in a deal worth Rs 450-500 crore. ICICI Venture had bought RFCL for only Rs 100 crore.

Avantor, previously known as Mallinckrodt Baker, was acquired in August by an affiliate of New Mountain Capital, a private equity fund. Investment bank N M Rothchild, which was advisor to an earlier transaction with Pfizer, was also advisor to this deal, according to sources. In a similar deal last year, RFCL’s animal healthcare vertical, Vetnex, was sold to Pfizer for $75 million (around Rs 334 crore).

When contacted, however, an ICICI Venture spokesperson declined to comment.

ICICI Venture acquired Ranbaxy Fine Chemicals in December 2005 through a leveraged buyout from Ranbaxy Laboratories at an enterprise value of $25 million. In 2006, it was renamed RFCL with three divisions: Vetnex, Diagnova (diagnostics) and Rankem (fine chemicals).
 

FAST BUCK

* ICICI Ven buys Ranbaxy arm for Rs 100 crore in 2005 

* Renames company RFCL, demerges animal health biz

* Sells business to Pfizer for Rs 334 crore in Dec 2009

* Sells the remaining part for Rs 500 crore to Avantor

Fine chemicals have highly specialised applications and are commonly used in pharmaceuticals, inks, performance-enhancing additives, special coatings and photographic materials. RFCL is also the domestic market leader in analytical lab chemicals and reagents.

It is among the top five players in in-vitro diagnostics products (testing kits required to detect diseases). RFCL has manufacturing facilities for diagnostics products at Dehradun and for lab chemicals and reagents at Panoli in Gujarat.

The global IVD market is expected to grow at a compounded annual rate of around 9 per cent between 2010 and 2012, and the Indian market is expected to grow above this rate, said industry sources.

ICICI Venture has invested in various life sciences companies like Arch Pharmalabs, Malladi Drugs, Bharat Biotech, I-Ven Pharma, RFCL, Metropolis, Avesthagen, Biocon, Medicorp, Intas Pharma, Sun Pharma and Swiss Biosciences.