Transaction:
Creador sold its stake in Ahmedabad based Corona Remedies to PE fund ChrysCapital. ChrysCapital paid Rs.6.7 billion ($90 million) for a 30% stake, of which 20% came from Creador and 10% from the promoter group. The deal values Corona Remedies at around Rs. 2300 Crore as reported by Economic Times.
Corona Remedies Pvt. Ltd.:
Ahmedabad based Corona Remedies Pvt. Ltd.’s product range includes formulations in therapeutic segments like gynaecology, cardio diabetic, nutraceuticals, anti-infective and paediatrics. The company has also acquired various brands from GSK & Abbott. Company was found by Dr. Kirtibhai Mehta and his two sons Nirav & Ankur and is backed by team of over 3000 professionals including around 1900 medical representatives.
ChrysCapital:
Established in 1999, ChrysCapital is an India focused investment firm with approximately $4 billion of assets under management across eight funds and series of successful exits. Its current portfolio consists of companies like Herofincorp, FirstCry, DreamSports, Intas pharma, Mankind, Eris pharma amongst others.
Rationale:
In 2016, Creador fund had invested INR1.18 billion in Corona Remedies for a minority stake and have said to made 35% IRR on their investment with this exit. Creador said that during their investment time frame the company’s sale went up by 2.6 times and EBITDA went up by 8 times.
Nirav Mehta, promoter of Corona commented that the Corona’s market beating growth has been result of focusing on the gaps in the market and focus on affordability.
Pharma API segment has become one of the most exciting segment in the deal space lately in Indian market which has traditionally favored the generics segment. Earlier the Chinese API players had dominated the markets due to strong price competition in the market. However in last few years many environmental curbs were placed on Chinese players due to their widely polluting nature. Global players are also de-risking their supply chains with china plus one strategy. Indian Government has also started Atmanirbhar initiative to reduce outside dependence. Indian API companies are increasingly doing very well presently and depending on the complexity and market of their products are commanding very attractive valuations.
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.
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