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Nirma, 3 private equity firms in race to buy Glenmark Life Sciences

Glenmark owns 82.8 per cent stake in the company which closed at a total market valuation of Rs 6,361 crore on Tuesday with its shares closing at Rs 519 a share on Tuesday

Glenmark Pharmaceuticals

Glenmark Pharmaceuticals

Dev Chatterjee Mumbai

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Ahmedabad-based Nirma group and leading private equity firms have joined the race to acquire BSE-listed Glenmark Life Sciences. 

The acquisition by chemicals-to-cement major Nirma, if successful, would be a major boost for the health-care segment of the group, on the lines of its successful entry into the cement sector following its purchase of Lafarge India’s assets for about Rs 9,400 crore in July 2016. It later followed up by buying Emami cement assets for Rs 5,500 crore in February 2020.

Glenmark owns an 82.8 per cent stake in the company, which has a market valuation of Rs 6,361 crore as on Tuesday, with its shares closing at Rs 519 apiece.

Besides Nirma, American private equity giants -- KKR, Blackstone and BPEA-EQT -- are interested in buying a stake in the company, said a banking source. “All the companies have done their due diligence and offers are expected soon,” said a banker close to the development. Glenmark will use the proceeds to reduce its net debt of Rs 2,904 crore as of March this year.

Glenmark, KKR, Blackstone, and BPEA EQT declined to comment. An e-mail sent to the Nirma group did not elicit any response until the time of going to press.

In April this year, the Nirma group acquired Stericon Pharma, an eye drop and contact lens maker, for around Rs 350 crore.

Set up by Karsanbhai Patel in 1969 as a detergent and soap company, the Nirma group today is a leading chemicals, cement and detergent manufacturer.

The acquisition of Glenmark Life Sciences will give a fillip to the group's ambitions in the health-care segment. The group already sells medical devices under Nirlife Healthcare.

Banking sources said the company has received good response from bidders after it posted revenue of Rs 621 crore with a 20.9 per cent in the March 2023 quarter on a year-on-year basis. Gross profit for the quarter was at Rs 341 crore, up 31.7 per cent year-on-year basis. For 2022-2023, the company made a net profit of Rs 467 crore on a revenue of Rs 2,161 crore.

Private equity firms are keen to invest in the fast-growing Indian health-care sector, especially in the post-pandemic world. In April, Singapore-based Temasek increased its stake in Manipal Healthcare to 59 per cent for $2 billion.

Earlier this month, a legal war over the acquisition of Care Hospitals broke out between Max Helathcare and Quality Care after Quality went ahead with an offer from Blackstone to sell Care Hospitals. The matter is under arbitration.

Nirma acquisitions

July 2016: Acquires LaFarge India cement assets for Rs 9,400 cr

Feb 2020: Bought Emami Cement assets for Rs 5,500 cr

April 2023: Buys Stericon Pharma for Rs 350 cr (approx)

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First Published: May 23 2023 | 7:40 PM IST

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