Bought for Rs 12.5 cr, sold at Rs 2000 cr; How Zandu scion scaled API business 160 times in 12 years
Pharmaceuticals firm ZCL Chemicals Ltd (ZCL) founder and promoters, Parikh family, on Thursday said global private equity investor Advent International will fully acquire the company for Rs 2,000 crore.
As part of definitive agreements signed last month, the Parikh family has sold its entire 80 per cent holding for about Rs 1,610 crore and has completely exited ZCL. Morgan Stanley Private Equity Asia (MSPEA), which acquired 20 per cent stake in ZCL for Rs 150 crore in 2016, has also exited ZCL for Rs 390 crore. Formerly known as Zandu Chemicals Ltd, ZCL is in the active pharmaceutical ingredients or API space in India. The Parikh family had acquired ZCL from Zandu Pharmaceuticals Ltd in 2008 at an equity valuation of Rs 12.5 crore, the Parikh family said in a statement.
ZCL Founder and Promoter Nihar Parikh said, “Some of the reasons for divesting ZCL Chemicals at this point of time include providing timely exit to Morgan Stanley, massive in-bound interests from buyout funds and also API industry has never got so much attention as it is getting right now.”
He further said, “ZCL has emerged as India’s fastest growing pharmaceutical company in the last 12 years. We are excited to achieve this strategic outcome for ZCL and its investors through this divestment. We are confident that Advent’s resources will be a catalyst for ZCL’s next stage of growth and innovation.”
The exit results in a 160 times return in 12 years at the current valuations of Rs 2,000 crore, the statement said.
As part of the agreements, out of the 80 per cent holding of the founder and promoters, 26 per cent will be transferred subject to the customary closing conditions and receipt of all applicable regulatory approvals, it added.
Mumbai-headquartered ZCL has a USFDA-approved facility at Ankleshwar in Gujarat. The company is a 100 per cent export oriented unit, with over 90 per cent of revenue from established markets like Europe and North America, the statement said.