Carlyle Group invests in Piramal

Via CA Clover Intermediate II Investments, private equity firm the Carlyle Group is to invest about $940 million in fresh equity capital for a 20% stake in Piramal Pharma, the healthcare subsidiary of Indian conglomerate Piramal Enterprises (PEL). This values the business at $2,775 million with an upside component of up to $360 million depending on the company’s performance this financial year.

As well as the CDMO business, Piramal Pharma Solutions, Piramal Pharma includes: Piramal Critical Care, a complex hospital generics business active in over 100 countries; the Consumer Products division, a consumer healthcare business selling OTC products in India; and PEL’s joint venture with ophthalmology firm Allergan India and Convergence Chemicals.

“This is an affirmation of the strength of our ability to build new, attractive and scalable businesses with a significant runway for continued organic growth and opportunities for consolidation,” said PEL chairman Ajay Piramal. “This infusion of funds will further strengthen our balance sheet and provide us with a war chest for the next phase of our strategy.”

The investment will be used as growth capital for the pharma businesses to expand capacity across and find acquisition opportunities within and outside India. It may also be used to strengthen the balance sheet through deleveraging in the near term.

Carlyle has experience in the sector, having owned the US-based CDMO AMRI since 2017. In India, it recently bought a majority stake investment in animal healthcare firm SeQuent Scientific, a major hospital in Delhi, and a chain of diagnostic centres and laboratories, among over $2.5 billion in total investments.