Mumbai: Kotak Strategic Situations Fund (KSSF), the alternative assets management fund of the Kotak Group, plans to invest about ₹1,600 crore in the active pharmaceutical ingredients (API) business that Nimmagadda Prasad acquired from Viatris last week, said two people aware of the development.
KSSF will back the $450-million (₹3,800 crore) acquisition through a $200-million funding made through a combination of structured debt and equity, said the sources.
Besides Kotak, Deutsche Bank and DBS have also financed the acquisition, the sources said. However, the exact structure of the transaction could not be ascertained.
Prasad, founder of Matrix Laboratories, had sold his API manufacturing business to Mylan (rebranded as Viatris) in 2007. The acquisition was made through Iquest Enterprises. In March, Kotak Investment Advisors had raised $1.25 billion as the first close of Kotak Strategic Situations Fund II (KSSF II) – which will provide strategic solution capital across growth and value companies. The sector-agnostic fund will provide equity, debt capital and hybrid capital.
The first fund, Kotak Special Situation Fund I, has fully deployed $1 billion in 14 companies, including ₹1,070 crore in Biocon.
Its major investments include AGS Transact Technologies, Sify Infinit Spaces, Gold Plus Glass Industry Ltd, logistics firm TVS Supply Chain Solutions, speciality chemicals firm DCW, cement player Sanghi Industries and Nuvoco Vistas.
Kotak Investment Advisors (KIAL), set up in 2005, has raised more than $8.7 billion across different asset classes, including private equity, real estate, infrastructure, special situations and listed strategies.
An email query sent to Kotak remained unanswered. Spokespersons of Iquest Enterprises, Deutsche Bank and DBS declined to comment.
Viatris had put its non-core India businesses, including API business and women’s healthcare business Famy Care, up for sale last year. However, the API sale process has not seen serious buyers, as the company has large exposure towards the antiretroviral (ARV for HIV/ AIDS) sector which sees a very low volume of sale, ET had reported.
Viatris was seeking an enterprise value of $600 million (₹5,000 crore) for the API business, a six times multiple of its FY24 EBITDA number, however, it sold it at a lower price.
