Global PE giant Carlyle to acquire 74% stake in India’s SeQuent for $210m

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Private equity firm Carlyle Group on Friday announced that it has agreed to acquire up to a 74 per cent stake in Indian animal healthcare company SeQuent Scientific Limited for about $210 million (Rs 1,580 crore).

Currently, the founder promoters of Sequent, including Arun Kumar, KR Ravishankar and family, together hold about 56.15 per cent stake in Sequent while Ascent Capital owns an over 5 per cent stake in the company.

CA Harbor Investments, an affiliated entity of CAP V Mauritius Limited and Carlyle, has proposed to acquire a majority stake in SeQuent via private share purchase agreements for a purchase price of Rs 86 per share, Carlyle said in a statement.

The firm plans to acquire a 44.92 per cent stake in SeQuent from its current controlling shareholders and a 5.69 per cent stake from Ascent Capital, the Indian company said in a BSE filing. The proposed transaction will trigger a mandatory open offer by CA Harbor Investments and CAP V Mauritius Limited for the purchase of up to 26 per cent stake in SeQuent from public shareholders.

The transaction is expected to close in the third quarter of 2020, subject to customary closing conditions and regulatory approvals. Following the completion of this transaction, CA Harbor Investments will become the new promoter of SeQuent, the statement added.

“We will draw on our global network, industry knowledge and operating expertise in healthcare to advise SeQuent on its business expansion strategy, enhance its operations, and help the company drive sales and product innovation,” Neeraj Bharadwaj, Managing Director of Carlyle Asia Partners, said.

“We see strong growth potential in the global animal health industry, including the livestock segment where SeQuent is operating, thanks to increasing demand for animal protein, rising awareness of food safety, and growing disposable income,” he added.

Headquartered in Mumbai, SeQuent provides animal health active pharmaceutical ingredients (API), formulations, and analytical services in over 100 countries, with more than 1,700 employees and manufacturing operations in India, Spain, Turkey, Germany and Brazil. SeQuent’s revenue for the twelve months ended December 2019 was Rs 1,160 crore and profit after tax for the same period stood at Rs 85 crore.

Private equity investors, including US-based Advent International and homegrown firm Kedaara Capital, were also reportedly in the fray to acquire Sequent.

“We are pleased to have achieved this strategic outcome for SeQuent and its investors through this divestment. We are confident that Carlyle’s global network and resources will be a catalyst for SeQuent’s next stage of growth and innovation,” Arun Kumar, on behalf of the current promoter group of SeQuent, said.

With $217 billion of assets under management globally, Carlyle has been investing in India since 2000. The firm has invested more than $2.5 billion in the country as of March 31, 2020. Its investments in the Indian healthcare sector also include Medanta Medicity Hospital and Metropolis Healthcare, which operates a chain of diagnostic centres and laboratories.

Its other notable investments include SBI Life, SBI Card, HDFC, India Infoline, Delhivery and PNB Housing Finance.

J.P. Morgan acted as exclusive financial advisor while Nishith Desai Associates acted as legal advisor to SeQuent and its promoters on the transaction. Nomura acted as exclusive financial advisor while AZB & Partners and White & Case acted as legal counsels to CA Harbor Investments and Carlyle. Nomura will also be acting as the manager for the public tender offer.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.