Piramal Enterprises Ltd (PEL) is looking at several acquisition opportunities across its pharma business, including a likely re-entry into domestic formulations, which the company exited in 2010.
The firm, in its FY21 annual report, said that it is looking at acquisitions of niche manufacturing capabilities for a Contract Development and Manufacturing Organisation (CDMO).
A CDMO is a firm that serves other companies in the pharmaceutical industry on a contract basis to deliver comprehensive services from drug development to manufacturing.
It is also looking at adding novel complex hospital generics through in-licensing, acquisitions,
and capital investments, and organic and inorganic addition of consumer healthcare products to leverage the pan-India distribution platform and explore re-entry into native formulations.
“The Carlyle Group’s recent strategic investment confirms the business’s underlying strength and provides us with a war chest for the next phase of growth,” stated Ajay Piramal, Chairman of Piramal Enterprises, in the annual report.
“Each of the pharma businesses has a compelling plan for organic growth, with multiple acquisition opportunities. We believe that we will continue to deliver in line with our long-term growth track record through organic initiatives. In addition, we will target a few more acquisitions to further boost our growth,” Piramal added.
A year ago, in one of the largest PE deals in the Indian pharma segment, Piramal raised Rs 3,523 crore from Carlyle. The deal was structured in such a way that the pharma business would be clubbed into a subsidiary called Piramal Pharma, a 100 percent-subsidiary of Piramal Enterprises, in which 20 percent equity would be given to Carlyle.
PEL would be the holding firm. Separate board and management teams were created for Piramal Pharma. The eventual goal is to demerge and separately list the pharma and fiscal services businesses.
The firm said it would utilise the divestment proceeds for pharma acquisitions, expansion of existing manufacturing operations and debt repayment.