Global private equity giant KKR has agreed to buy a 54% stake in Indian pharmaceutical business JB Chemicals, in a deal which could ultimately see it commit $500m to the company.
KKR has agreed to pick up 41.7 million shares in JB at INR745 each, a deal which triggers an offer for an additional 26% stake purchase.
The private equity house will ultimtely look to cap its holding at just shy of 65% of the business, however, which would see it pay about $500m.
JB supplies products targeting cardiac, gastrointestinal and anti-infective therapeutic areas across the branded formulations market. The Company’s portfolio includes four flagship brands in India – Cilacar, Metrogyl, Nicardia and Rantac.
Sanjay Nayar, partner and CEO of KKR India, said, “We are pleased that the promoters of JB Chemicals have selected us to take over their rich legacy and to help the company continue its expansion, which is clearly driven by its diversified product portfolio and state-of-the-art manufacturing capabilities.
“We believe JB Chemicals has an opportunity to accelerate its growth and leverage its strengths to enter into new therapeutic areas.
“We look forward to working with the management team to build on the company’s strong foundation, and believe this investment underscores KKR’s ongoing commitment to India’s long-term economic prospects and the potential of its companies.”
In India, KKR’s pharmaceutical and healthcare investments include Max Healthcare and Radiant Life Care, which collectively comprise the largest hospital network in North India.
KKR has also previously invested in Gland Pharma, an Indian pure-play generic injectable pharmaceutical products company that was the first company in India to get US Food and Drug Administration approval for pharmaceutical liquid injectable products.
KKR will fund this investment from its $9.3bn Asian Fund III, raised in 2017.
A report last month suggested KKR had hauled in more than $10bn for its fourth pan-Asian private equity fund, putting it within a whisker of becoming the biggest-ever PE vehicle raised targeting the region.
The firm, which is eyeing up to $12.5bn for Asian Fund IV, has taken just seven months to hit the $10bn mark according to Bloomberg, which cited unnamed people it said were familiar with the matter.
KKR is now set to outdo the $10.6bn collected by Hillhouse Capital for its Asia fund in 2018.
