The transfer of equity will take place through the Group’s special purpose vehicle Curie, a notice of the combination by the regulator said.
The deal, which was valued at $ 490 million (Rs 3,700 crore), valued PEL’s pharma business at about Rs 20,000 crore, according to reports.
Including debt, the pharma business was valued at $ 2.78 billion with an upside component of up to $ 360 million depending on the company’s FY21 performance, the company said in its exchange filing.
The actual investment amount may vary based on the exchange rate, net debt and performance against the pre-agreed conditions at the time of closing of the deal, it said.
PEL said the proceeds from the deal would be used as growth capital to expand existing capacities of its pharma business, fund potential acquisitions and to strengthen its balance sheets through short term deleveraging.
The Ajay Piramal promoted group has seen its balance sheet come under stress over the last year owing to its exposure to weakened corporate lenders and developers who borrowed from its non-banking financial company arm.
PEL’s market cap stood at Rs 30,079 crore as of Friday. The pharma business clocked 15% CAGR over the last nine years closing FY20 with revenues of Rs 5,914 crore contributing to 41% of the parent firm’s revenue. Piramal Pharma’s EBITDA stood at Rs 1,463 crore in FY20 with a 26% margin.
The Carlyle Group is a global alternative asset manager whose affiliated investment funds own and control Curie.
This will be the US private equity group’s second pharma transaction after having bought SeQuent Scientific, India’s largest pure-play animal healthcare company in May.