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Multiples-led group to buy Cadila’s animal health unit

The consortium is purchasing the business from Zydus Animal Health and Investments Ltd through a special-purpose vehicle Zenex Animal Health India Pvt. Ltd.Premium
The consortium is purchasing the business from Zydus Animal Health and Investments Ltd through a special-purpose vehicle Zenex Animal Health India Pvt. Ltd.

Zydus Animal Health and Investments Ltd (ZAHL), a wholly owned subsidiary of Cadila Healthcare Ltd, has entered into an agreement to sell its Animal Healthcare Established Markets Undertaking (Zydus AH) to a consortium led by private equity firm Multiples Alternate Asset Management for 2,921 crore

MUMBAI : Zydus Animal Health and Investments Ltd (ZAHL), a wholly owned subsidiary of Cadila Healthcare Ltd, has entered into an agreement to sell its Animal Healthcare Established Markets Undertaking (Zydus AH) to a consortium led by private equity firm Multiples Alternate Asset Management for 2,921 crore.

Zydus AH is the animal health business of ZAHL focused on India and some other countries.

The consortium, including Canada Pension Plan Investment Board (CPPIB) and Rakesh Jhunjuwala’s RARE Enterprises, has agreed to purchase the business through a special purpose vehicle, Zenex Animal Health India Pvt. Ltd.

“Zydus AH is the second-largest and one of the fastest-growing animal health businesses in India. The business enjoys a leadership position across a wide spectrum of therapeutic and nutritional products for livestock and poultry animal segments. It employs approximately 700 people and has a manufacturing facility in Haridwar," Cadila said.

“Over the last three decades, Zydus AH has grown to become a pioneer and market leader in the Indian animal health industry. With Multiples and its consortium partners committed to boosting the business, we are sure that Zydus AH will continue to grow and strengthen its position in the industry," said Pankaj Patel, chairman of Cadila Healthcare Ltd.

For the fiscal ending 31 March 2020, the business had reported a revenue of 513.3 crore and an Ebitda of 87.6 crore. Ebitda is earnings before interest, taxes, depreciation and amortization.

“ZAHL initiated the process to look for strategic and/or financial partners who share the same values and growth ambition for the business with an intention to invite them to take equity stake in ZAHL," the company said.

“During the process, ZAHL realized that the preference of the investors was to get majority or total and absolute control of the business of its Animal Healthcare Established Markets Undertaking (rather than becoming a significant minority partner in ZAHL)," the company added.

ZAHL has another animal healthcare business undertaking that is expected to commence operations in the US and certain European countries, which is not part of the transaction. Zydus continues to develop animal health business products for those markets. At present, this business is in the development and investment phase, the company said.

“Zydus AH is a strong leader in the Indian animal health market with strong brands, comprehensive product portfolio and extensive distribution network," said Renuka Ramnath, founder and chief executive officer, Multiples Alternate Asset Management.

“I expect Multiples to do many such large transactions in the coming years. We are also delighted to partner with CPP Investment Board and RARE Enterprises for our first consortium deal. We look forward to working with them and help the company unlock its full potential and create value for all stakeholders," Ramnath said.

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