Torrent Pharma in talks with CVC, Bain Capital to raise funds for Cipla buyout
Torrent Pharmaceuticals is in talks with private equity funds CVC Capital Partners and Bain Capital to raise up to $1.5 billion to bid for India's Cipla.
PremiumIn a bid to raise funds for buying stake in Cipla, Torrent Pharmaceuticals is in talks with private equity funds CVC Capital Partners and Bain Capital. The Indian pharmaceutical is planning to raise up to $1.5 billion to bid for Cipla, reported Reuters citing sources familiar with the matter.
Torrent is striving to finalise a deal that may bring the firm a strategic position in Cipla. The deal can become one of the largest pharma deals in India ever. Torrent and Blackstone are among those interested to acquire a stake in Cipla, India's third-biggest drugmaker by sales, in what could be the largest pharma deal in India ever.
Cipla's founding family is also keen to sell their 33.4% holding entirely, reported Reuters citing sources. A successfull bidding will pave way for another 26% stake, as per Indian regulations. If this happens, it will translate to a $6.75 - $7 billion deal, Bernstein estimated in an Aug. 30 report.
The consortium financing partner of Torrent is expected to be finalised within next few days, reported the news agency. Mint couldn't independently confirm the information. Bain and Blackstone declined to comment while Cipla, Torrent and CVC did not respond to comments.
Torrent and Blackstone both have submitted non-binding bids for Cipla, reported Reuters.
The talks between CVC and Torrent was first reported by the ET on Monday. Cipla also enjoys a vast share of medicine exports to North America and South Africa. It primarily sells medicines to treat illnesses like cold, fever and headaches. The Indian firm is a direct competitor of global market players like Pfizer and Abbott.
Torrent's market cap is 54% lower than Cipla's $11.9 billion. Its business is present in more than 40 countries and primarily caters to the medicine needs of patients consuming medicines for diabetes, pain management, gynaecology, oncology and anti-infective segments.
The pharma deal has also attracted foreign banks like Morgan Stanley and Barclays for investment. The two are in talks with Torrent to arrange potential debt financing for the deal, sources told Reuters. There was no official statement by Barclays and Morgan Stanley.
Instead of welcoming a pure financial investor, Cipla is also aiming to get a strategic partner on board, like Torrent. However, the final decision is yet to be taken.
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