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Business News/ Companies / News/  Advent International to acquire majority stake in ZCL Chemicals
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Advent International to acquire majority stake in ZCL Chemicals

The acquisition pegs an enterprise valuation of ₹1,700 crore for pharma firm ZCL Chemicals

The transaction values ZCL at an enterprise valuation of ₹1,700 crore.. Photo: MintPremium
The transaction values ZCL at an enterprise valuation of 1,700 crore.. Photo: Mint

Private equity firm Advent International on Monday said that it has signed a definitive agreement to acquire a majority stake in pharmaceutical firm ZCL Chemicals Ltd.

Financial details of the transaction were not disclosed. However, a person aware of the transaction said the acquisition pegs an enterprise valuation of 1,700 crore for the company, which was earlier known as Zandu Chemicals Ltd.

With this transaction, Morgan Stanley Private Equity Asia, a private equity platform that previously managed a minority investment in ZCL, will exit its investment, Advent International said in a statement.

ZCL focuses on niche therapeutic areas, making specialty active pharmaceutical ingredients (APIs) and advanced intermediates. In its statement, Advent said that the company has delivered impressive growth over the past few years, has leading market positions in its existing products, and is developing a strong pipeline of high-potential products that is expected to drive the next phase of its growth.

“ZCL will be our third pharmaceuticals investment in India and the second in the API space. ZCL is a high-growth business, led by a capable management team, which will further fortify our presence in the API market, a key sub-sector focus of ours," said Shweta Jalan, a managing director and head of India at Advent International.

Over the last 12 months, Advent has committed over $1.2 billion globally across the healthcare sector. The firm has also committed over $600 million in four Indian businesses over the same period in varied sectors such as healthcare, consumer and financial services.

“We are impressed with ZCL’s differentiated product portfolio, strong pipeline and its high focus on quality and compliance. The acquisition of ZCL helps us get closer to our goal of creating a top-five merchant API platform in India," said Pankaj Patwari, director at Advent International India.

Advent has been investing in India since 2007. It has deployed over $1.7 billion in 12 companies with headquarters or operations in the country. In addition to ZCL, new investments in last 12 months include RA Chem Ltd, a vertically integrated pharmaceutical firm; Bharat Serums and Vaccines, a biopharmaceutical firm; and Aditya Birla Capital, the holding company of the financial services businesses of Aditya Birla Group.

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ABOUT THE AUTHOR
Swaraj Singh Dhanjal
" Based in Mumbai, Swaraj Singh Dhanjal is responsible for Mint’s corporate news coverage. For the past eight years he has been writing on the biggest deals in private equity, venture capital, IPO market and corporate mergers and acquisitions. An engineer and an MBA, he started his journalism career in 2014 with Mint. "
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Published: 08 Feb 2021, 05:28 PM IST
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