Bharat Serums and Vaccines (BSV), the Mumbai-based biopharmaceutical firm known for its niche and differentiated products, is back in the news again.
Quoting sources, The Economic Times reported that a consortium of private equity firm Carlyle and Zydus Cadila is competing with private equity group Advent International to acquire BSV. The report said two parties have submitted non-binding offers in the range of Rs 3,450-3,600 crore ($500-520 million).
BSV couldn’t be reached for a comment. A member of Daftary family told Moneycontrol that the reports of promoters exiting weren’t true.
Rumours of Carlyle as a potential buyer have been doing the rounds for more than five years. Dr Reddy’s, Mankind and Goldman Sachs are other names that have emerged.
The two PE investors Orbimed Asia (18 percent) and Kotak Private Equity (5 percent), who together own about 23 percent stake in the company, have been exploring exit options for some time.
Orbimed came on board in 2010 by investing an undisclosed sum in BSV.
The Daftary family, represented by two brothers Bharat Daftary and Gautam Daftary, owns the rest.
Earlier too BSV had evaluated the option of going for an initial public offering (IPO) to provide an exit to the PE investors, but that didn’t materialise. The company was valued at $1 billion at that time.
Why is BSV an attractive proposition?
Focus on R&D, technical competence, niche and complex product portfolio are some of the factors that make BSV as attractive proposition for PE investors and pharma companies.
Founded in 1971 by late Vinod Daftary, a medical doctor with specialisation in pathology, BSV started out as plasma fractionating company producing blood proteins.
In 1987, the company diversified into chemical entities and equine immune globulin segment. The company developed anti-venom injection derived from horse blood. It later developed monoclonal antibody called Rhoclone, to treat a disease called Rhesus where antibodies in a pregnant woman’s blood destroy her baby’s blood cells. The company also entered vaccine segment by launching world’s first monoclonal antibody for human tetanus.
Managed by second generation – Bharat Daftary, CMD and Dr Gautam Daftary, Vice-Chairman, BSV has a wide product portfolio of plasma derivatives, monoclonal antibodies, hormones, equine anti toxins and serums, antifungals, anesthetics, cardiovascular and diagnostic products.
The company has revenues of Rs 705.55 crore in 2017, with a profit of Rs 99 crore. The revenues grew 13 percent compared to previous year. There no details availbale on 2018 financials.
BSV operates R&D facilities in India, Germany and USA and a horse farm for production of equine anti sera and anti toxins.
The company has manufacturing facilities in Ambernath, Maharashtra; Ahmedabad, Gujarat; and Aachen, Germany, on ownership and JV basis.
“The group has strong market position in the bio-pharmaceutical industry backed by strong technical knowhow, a niche product portfolio, integrated operations, and established supply linkages, and enjoys a leading market share for most of its best-selling products in the Indian market,” rating agency Crisil said in a July 2018 report.
“The growth has been driven by increasing market penetration and better utilisation of enhanced capacities,” Crisil added. – Moneycontrol