VC Circle reported:
Private equity firm Carlyle has agreed to acquire up to 74% of animal healthcare company SeQuent Scientific Ltd for Rs 1,580 crore (about $210 million) in what would be its biggest control-oriented deal in India.
This is also one of the few buyout deals that Carlyle has struck in India even though it has had a buyout team in India for a decade and a half.
SeQuent functions in the animal health segment through subsidiary Alivira Animal Health. It also provides analytical services.
SeQuent and its two co-founders are also promoters of two other listed companies – Strides Pharma Science Ltd and Solara Active Pharma Sciences Ltd.One month ago SeQuent wrote about the company's status under the coronavirus pandemic:
Pharmaceuticals and specifically Animal health industry which we cater to, has been categorized as an essential industry across the globe and hence there has been no perceptible impact on the industry. Within the animal health industry, we cater to the production animals' segment, which is not a discretionary spend and hence lock-downs or economic slow-downs have little impact on this business. On the contrary, we do see some positive momentum given that we straddle the generics space which offers better cost dynamics to our customers.Economic Times reported:
The final negotiations took longer because of the price correction in the stock, said one of the people. Carlyle revised their price downwards after the stock came off, he said. This could not be independently verified.The company manufactures active pharmaceutical ingredients in plants around the world.
The Sequent stock has been volatile for the last few months in anticipation of a sale, reaching a 52-week high of Rs 99.35 on February 24 and then a low of Rs 55.25 the very next month, on March 19.
Carlyle has a wide exposure in the animal health space through multiple investments in the last two decades. It had acquired animal nutrition and care products firm Manna Pro Products and sold it in 2017 to Morgan Stanley Capital Partners. The group had sold Saprogal, a producer of animal feed, to the Spanish private equity group Mercapital in 2005.
Sequent manufactures 26 commercial APIs and 1,000 finished dosage formulations (FDFs) of 12 dosage forms and markets those in more than 100 countries.
Our API factories in India did see slight manpower availability disruption at the start of the lockdown, but the situation has since getting better. We expect this situation to continue in the medium term and adequate procedures are in place to continue the BCP for the remainder of the COVID-19 crisis.The plant in Vizag, India is US FDA approved for animal health manufacturing. India stopped exporting pharmaceutical ingredients, then relaxed the ban somewhat.
Many of our global businesses have shown great resilience during these times. Factories at Spain, Turkey, Germany and Brazil are operating at normal levels while all non-manufacturing related staff are working from home.
We have however put on hold our capacity expansion project at the Germany plant, which was scheduled to be initiated from July 2020 till more clarity emerges. Our ongoing expansion at Vizag have also been suitably moderated to minimise human presence at the site, without impacting the growth prospects.
The U.S. lacks the ability to produce treatments and/or vaccines to address COVID-19
At least 80% of the active ingredients found in all of America's medicines come from abroad - primarily China, according to the Senate Finance Committee.What does Carlyle see in SeQuent that could produce massive returns during a pandemic?
