Mumbai: Private equity (PE) funds Bain Capital LP, Swiss fund Partners Group AG, Advent International Corp. and Carlyle Group are in the race to acquire surgical equipment maker Sutures India Pvt. Ltd in a deal worth about $425 million (Rs2,740 crore), according to two people aware of the development.
The deal will value Sutures at $500 million (Rs3,220 crore), said the first person, requesting anonymity.
TPG Growth owns around 73% in Sutures India, while another PE fund CX Partners holds 12%. The rest is held by promoters.
Investment bank Goldman Sachs Group Inc. is advising TPG on the sale.
While the PE investors will make a complete exit, the promoters plan to retain their stake, said the second person on condition of anonymity.
Bengaluru-based Sutures, which makes surgical and wound-closure products such as natural and synthetic, absorbable and non-absorbable sutures, surgical needles, staples, tapes and bone wax, competes with firms such as Smith and Nephew Plc, Ethicon Inc. and ConvaTec.
TPG Growth invested in Sutures in 2013 by acquiring a 23% stake from CX Partners and the firm’s promoters for Rs145 crore.
Over time, TPG raised its stake and now holds a majority in Sutures.
Spokespersons for Partners Group, Carlyle, Bain Capital and Goldman Sachs declined to comment.
Emails sent to Sutures India, Advent and CX Partners and TPG Capital remained unanswered.
Founded in 1992, Sutures exports products to 91 countries in Europe, South America, Africa and Asia. It also supplies to over 10,000 hospitals across India.
CX Partners has been looking for a complete exit from Sutures since last year. Last year, domestic private equity fund Kedaara Capital had emerged as the front-runner for acquiring CX Partners’ remaining stake in Sutures India, Mint had reported in April 2016. The deal did not go through. Besides Kedaara, Malaysian sovereign wealth fund Khazanah Nasional Bhd had evinced interest in Sutures India.
CX Partners had acquired a 37% stake in Sutures for about Rs200 crore in 2012 by buying out the entire stake held by India Life Sciences Fund, which fell to 12% in the next two years.
At least four entities—US-based medical devices makers Boston Scientific Corp. and Covidien Medtronic of Ireland, and private equity funds Carlyle and Advent International, are interested in a majority stake in Bengaluru-based Healthium Medtech Pvt. Ltd (HMPL), which owns Sutures India, Mint reported in August.
In FY16, Healthium reported a net profit of Rs41.6 crore on an operating income of Rs362.2 crore at the consolidated level, according to its latest corporate filings.
Indian companies sealed deals (M&A and PE) worth $47.8 billion year-to-date (YTD) 2017, witnessing a 34% increase from the previous year and recording a six-year high in deal value which was primarily driven by big ticket transactions, according to a Grant Thornton report released in October. The growth in deal value was mainly driven by big ticket PE investments.
Last year, Advent International had sold its 72% stake in CARE Hospitals to UAE-based Abraaj Group for about Rs1,300 crore.
The investment, made in 2012, was the only investment by Advent in Indian healthcare space. Carlyle’s healthcare investments in India include Global Health Pvt. Ltd, which runs Medanta Medicity Hospital and diagnostic chain Metropolis Healthcare Ltd.
According to a report by Crisil Research, the Indian healthcare delivery market is expected to expand at a compound annual growth rate, or CAGR, of 12% to reach Rs6.8 trillion by 2019-20.
The size of the Indian healthcare delivery industry in 2014-15 was Rs3.8 trillion, according to a Crisil report.