Transaction:
- Mankind Pharma Limited is to acquire 100% stake in Bharat Serums and Vaccines Limited (BSV) from PE fund Advent International for an EV of Rs. 13,630 Crores.
- The transaction was done at EV/Ebitda multiple of around 22x to 23x.
- The deal will be through around Rs 4,000 crore in internal accruals and mix of debt and equity. Mankind Pharma has appointed Barclays and Deutsche Bank to arrange financing for its acquisition.
About Bharat Serums and Vaccines Limited (BSV):
- Founded in 1971, Bharat Serums is a biopharmaceutical company with R&D facilities in India, Ukraine, Germany, the Philippines and Malaysia, manufacturing facilities in India and Germany and presence in over 70 countries.
- The domestic Brand portfolio comprises of large brands covering women’s healthcare, fertility, critical care, and immunoglobulins. It also operates within a high entry barrier portfolio, ensuring a competitive edge and sustained profitability.
About Mankind Pharma Limited:
- Founded in 1991, Mankind Pharma Limited is India’s fourth largest pharmaceutical company with more than 23,000 employees, having a product portfolio spanning formulations across acute and therapeutic areas as well as consumer healthcare products.
- It offers popular brands like Gas-O-fast sachets, Manforce Condoms, Prega News testing kit making significant contributions to healthcare.
Rationale:
- The strategic move marks position of Mankind Pharma as a market leader in the Indian women’s health and fertility segment alongside access to other high entry barrier products in critical care with established complex R&D tech platforms.
- The acquisition enhances Mankind’s portfolio, which will contain more than 40 brands valued at more than Rs. 50 crore and presence in OTC segment expanding to consumer wellness, while bolstering pregnancy care and sexual wellness.
- The deal will make Mankind the leader in the fast-growing gynaecology-fertility or women’s health segment with an around 20% market share. While in FY24, Mankind’s market share in the segment was 8.19%.
- Mankind also has a good foothold in Tier 2 to 6 cities, which are not covered by bigger players leading to leveraging on its new product portfolio driven by synergy benefits, cost optimisation and product launches.
- BSV reported revenues during FY24 stood at ₹1,723 crore, with year-on-year growth of 20% and an EBITDA margin of 28%. It has posted a 21% compounded annual growth rate over the last three years. While domestic markets contributed 54% to the sales, Branded international sales stood at 46%. Mankind’s FY24 sales stood at Rs. 10,335 crore, with EBITDA at Rs. 2,550 crore and EBITDA margin of 24.7%.
- Mankind Pharma rose as much as 1.2% following Thursday’s Bloomberg News report. The shares are up about 6.5% this year and 10% in the past 12 months.
- Mankind Pharma pipped the combine of Baring Private Equity and Abu Dhabi Investment Authority that had a bid little over Rs. 13,000 Crores. Advent International which had acquired BSV in 2019 had put the company on block last year.
Acknowledgements:
RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)
Disclaimer:
This material has been prepared by the personnel in Vora Corporate Finance which is Investment Banking arm of Vora Management Consultancy Private Limited and looks after Mergers & Acquisitions (M&A), Private Equity (PE), Fund Raising, Debt syndication and Valuations and is based out of Ahmedabad, Gujarat, India. Any views or opinions expressed herein are solely that of individual authors and may differ from view of Vora Management Consultancy Private Limited. This material is proprietary to Vora Management Consultancy Private Limited and is for your personal use only. Any distribution, copy, reprints or forward to others is strictly prohibited.
This material captures the information based on information available in the public domain, public announcements and sources believed to be reliable. Analysis contained herein is based on publicly available information and appropriate assumptions. This material is intended merely to highlight market developments and is not intended to be comprehensive and does not constitute strategic, investment, legal or tax advice. In no event Vora Management Consultancy Private Limited be liable for any use by any party or for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you for evaluating any transaction.