Temasek in advanced talks for 40% stake in True North-owned Integrace

MUMBAI: Singapore government-owned Temasek Holdings is in advanced discussions to acquire about 40 per cent stake in Mumbai-based pharmaceutical formulations manufacturer Integrace, people aware of the development told ET.

Temasek will invest about Rs 550 crore ($75 million) in Integrace at a valuation of about Rs1200 crore, they said.

True North, the private equity fund which owns Integrace, will hold 55 per cent stake and the management will hold the rest.

The deal will be signed in the next couple of weeks, said one of the persons cited earlier.

Kuala Lumpur-based Creador and homegrown PE fund Kedaara Capital were the other companies in the race for a stake in Integrace.

ET had reported in July that three PE funds are in separate talks to acquire a significant minority stake in Integrace.

Investment bank Rothschild is advising True North in the stake sale.

Spokespersons of Temasek and True North declined to comment.

With this proposed fund, Integrace plans to acquire more formulation brands in pain management, neurology and women’s health. For FY21, Integrace had posted a revenue of Rs 280 crore with an EBITDA of Rs75 crore, said sources in the know.

Integrace, set up in 2018, had acquired Glenmark Pharmaceuticals‘ gynaecology business for Rs 115 crore in cash, and Glenmark’s orthopaedic and pain management business in India and Nepal, valuing the business at Rs 635 crore in 2018.

If a deal with Temasek materialises, it will mark the fifth partial exit by True North in the last one year.

In April, True North had sold a part of its holding in IPO-bound Policybazaar to five buyers, including Serum Institute of India.

In May, True North made a partial exit from the IPO-bound Fincare Small Finance Bank, when Motilal Oswal Private Equity invested around Rs 185 crore. In October 2020, True North had sold its part stake in affordable housing loan provider Home First Finance to PE firm Warburg Pincus.

True North had also made a partial exit from SeedWorks International, a hybrid seeds developer and manufacturer, in September 2020.

Last month, True North sold its controlling stake in Atria Convergence Technologies to Swiss PE fund Partners Group at an Enterprise Value of nearly Rs 9,000 crore.

Temasek has invested about $14 billion in India as of March 31, 2021 compared with $9 billion a year ago. An active investor in the healthcare and pharmaceuticals industry in India, Temasek has major portfolios such as Global Health (Medanta), Intas Pharmaceuticals, PharmEasy and Syngene International.

From $41.7 billion in 2020, the Indian pharma industry is expected to grow at a CAGR of 12 per cent to reach $130 billion by 2030, according to a recent EY report.

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