Kotak Alternate Asset Managers Limited (KAAML) has invested Rs 1,445 crore ($173 million) to part-finance Matrix Pharma’s acquisition of the active pharmaceutical ingredients (API) business of Viatris. The investment has been made through the Strategic Situations Fund II of KAAML, according to a statement.
Post this acquisition, Matrix will be the second largest Indian API player and will gain access to strong R&D capabilities, including 185+ scientists and 600+ DMF filings.
KAAML will enable Matrix to consolidate its leadership in the API business by strengthening its third-party sales and will selectively evaluate inorganic opportunities in the pharma contract development and manufacturing organisation (CDMO) space, the firm said in a statement.
Viatris was created through a merger of Mylan and Pfizer’s Upjohn unit in 2020. Last year, Viatris signed a deal to sell two of its businesses in India for $1.2 billion to IQuest Enterprises, owned by Matrix.
“This buyout of a significant business along with key incumbent management coming on board, demonstrates Kotak Alt’s strong deal sourcing and structuring capabilities. It underscores our pharma industry capabilities and ability to create a platform to build a robust API business, which we can support with organic and inorganic growth,” Srini Sriniwasan, Managing Director, KAAML, said.
Earlier this year, Strategic Situations Fund II raised $1.25 billion in its first close. With a target of $1.6 billion, the sector-agnostic fund was closed a month after the $1-billion Kotak Special Situations Fund completely deployed its corpus. It last invested Rs. 1,070 crore in Biocon.
In April, a fund managed by Edelweiss Alternatives committed Rs. 200 crore to a debt facility being arranged by Kotak Strategic Situations Fund to finance Matrix’s acquisition of the API business of Viatris.
The Special Situation Fund’s investment objective is to generate target returns by primarily investing in distressed/stressed or special situation opportunities in India.
Set up in early 2005, KAAML, focuses on alternate assets management and investment advisory businesses. KAAML was set up in early 2005 and has raised/managed/advised over $22 billion across different asset classes including Private Equity, Real Estate, Infrastructure, Special Situations, Private Credit and Investment Advisory.
The acquisition of the API business comes as India witnesses an unprecedented demand for healthcare amid an ageing population and rising disposable incomes.
Recent billion-dollar deals such as Temasek’s investment in Manipal Hospitals and Blackstone’s $1-billion acquisition of CARE Hospitals have spurred a host of new healthcare funds in the world’s most populous country.
Last month, Maiva Pharma, a CDMO for North America, said it has raised Rs 1,000 crore in primary and secondary funding from a fund managed by Morgan Stanley Private Equity Asia and India Life Sciences Fund IV.
