Mumbai: Private equity funds Carlyle Group and Advent International are poised to submit binding offers to buy a minority stake in Mankind Pharma Ltd, according to two people familiar with the matter.
The bids will value the maker of Manforce condoms and pregnancy test kit PregaNews in the range of $3.2-3.4 billion, said the first person on condition of anonymity. The PE funds are in discussions to acquire about 15-20% stake in the company, the second person mentioned above said, requesting anonymity. Investment bank Moelis & Co. is advising Mankind on the transaction.
Set up in 1986, Mankind Pharma has more than 14,000 employees and revenue of Rs4,400 crore. Promoter Ramesh Juneja and family his own 89% in the company. The rest is held by PE fund Capital International.
Domestic sales of about Rs4,250 crore make it the fifth-largest company in the retail pharma sector in India. Mankind operates in 22 overseas destinations across Asia, Africa, South-East Asia and the Gulf countries. It has begun operations in the markets of Commonwealth Independent States, Uzbekistan and Tajikistan.
Mankind Pharma also owns brands including Manforce tablets, Manforce Staylong Gel, emergency contraceptives Unwanted-72, Adiction deodorants for men, Gas-O-Fast sachet for acidity, Kaloree-1 artificial sweetener and Heal-O-Kind anti-bacterial balm.
It was in 2015 that PE fund ChrysCapital sold its 11% stake in Mankind to Capital International in a deal worth Rs1,400 crore, which valued Mankind at around Rs12,700 crore.
Currently, 88% of Mankind’s revenue comes from its over-the-counter and FMCG divisions, while the rest comes from prescription medicines and veterinary divisions.
In financial year 2016-17, Mankind Pharma clocked revenue of around Rs4,400 crore, an increase of 13% from a year earlier. Currently, the company’s international business, which includes markets in Africa and Asia, contribute just Rs100 crore. The company’s operating margin is about 21%.
Emails sent to Moelis did not elicit any response while Advent and Carlyle spokespersons declined to comment. Messages and calls made to Rajesh Juneja went unanswered.
As part of its expansion plans, Mankind Pharma is working to enter the lucrative US drug market and plans to file its first set of generic products with the drugs regulator in 2018 even as India remains a priority market, Mint reported in September last year.
Mankind Pharma, which has 18 manufacturing units at Paonta Sahib in Himachal Pradesh, commissioned a new plant in Sikkim last year. In 2015, Carlyle sold its nine-year-old investment in pharmaceutical firm Claris Lifesciences Ltd through a secondary market transaction.
Although Advent has a strong presence in India through its investments in the retail and consumer sectors—inner wear brand Dixcy Textiles Pvt. Ltd and Crompton Greaves Consumer Electricals Ltd -- the fund has not invested in pharmaceuticals so far. Carlyle owns a 27% stake in Gurgaon-based super speciality hospital, Medanta -The Medicity, owned by renowned cardiac surgeon Naresh Trehan.