New Delhi: Warburg Pincus And Chris Capital will compete with TPG, black Stone And EQTas well as Mankind PharmaTo get BSV Groupin the past Bharat Serum and Vaccine The company has been valued at Rs 12,000-13,000 crore ($1.4-1.5 billion), people familiar with the matter said. The five have been shortlisted after non-binding bids were submitted last week.

Dr Reddy’s Laboratories may also join the race, as they have asked for additional time to submit their bids. Advent International The portfolio company is expected to submit its non-binding bid this week, people familiar with the matter said. Due diligence will continue for the next four to six weeks, before a final offer is submitted in July.

Earlier this year, Advent had appointed JPMorgan and Jefferies to sell a controlling stake in the Mumbai-based biopharma firm, five years after it bought a controlling stake in it for Rs 3,500 crore ($500 million).

‘EBITDA grew three-fold under Advent’
After acquiring a 74% stake in BSV from the founding Daftary family in 2019, Advent bought out the rest last year. Several PE funds – Permira, Partners Group and CVC Capital, among others – explored the opportunity but eventually did not bid due to expectations of a higher valuation, at 20x FY25 Ebitda, possibly Rs 630-650 crore. Spokespersons for Advent, Warburg Pincus, Mannkind and ChrysCapital did not respond to ET’s queries. Blackstone, EQT, TPG and Dr Reddy’s Labs declined to comment. Mannkind partnered with long-time backer ChrysCapital to acquire medical device and sutures maker Healthium last month, but has so far decided to go it alone.

focus on women’s health
Incorporated in 1971, BSV is engaged in the development, manufacturing and marketing of biologics, biotechnology and pharmaceutical formulations. Its product profile includes plasma derivatives, monoclonal antibodies, reproductive hormones, antitoxins, antifungals, anesthetics, cardiovascular drugs and diagnostic products. Three-fourths of its sales come from the women’s health segment, particularly hormones used to stimulate fertility and for assisted reproduction such as in-vitro fertilisation (IVF). A quarter of sales are from the critical care segment, which includes antifungals, anesthetics and injectables, as well as a portfolio of serums against snake bites, etc., antibodies for immune-weakened people due to diseases such as cancer. BSV has manufacturing units in Mumbai and Hyderabad, a research and development (R&D) unit in Navi Mumbai, and wholly-owned subsidiaries in the US, Germany, the Philippines and India. While the Philippines subsidiary acts as a marketing arm, the German facility has API manufacturing capabilities. The US unit serves as a hub for R&D and clinical trials. In FY24, the company posted EBITDA of Rs 480 crore on sales of Rs 1,700 crore. It expects sales to reach Rs 2,000 crore in FY25.

“Under Advent, (BSV’s) Ebitda has grown threefold,” said a Mumbai-based pharma analyst who asked not to be named. “The management team was changed, and operations and supply chain were streamlined. The Bolton acquisition also complemented and strengthened the portfolio.”

Deal Scene

In March 2022, BSV acquired TTK Healthcare’s human pharma division for Rs 805 crore through a slump sale involving cash and stock. Being heavy on infertility and gynaecology products, the portfolio was complementary to BSV’s portfolio. TTK’s top brands include Osopan (calcium supplement), Lactair (galactagogue), infertility brands such as CCQ, Evaserve and Carni-Q, as well as respiratory drug Levokast. Domestic Consolidation Pharma Sector This has been led largely by PE funds.

However, domestic drugmakers such as Aurobindo, Torrent and Mankind are looking for new growth opportunities in India as well as abroad. After a long gap, DRL is also looking at acquisitions for inorganic expansion. “BSV Group is a special player,” said a chief executive of a pharma company that has evaluated it in the past.

“The sales and distribution channels are unique – fertility clinics, hospitals or government tenders. Unlike DRL, which has the R&D DNA, other strategic players (in BSV) do not have any particular edge, but IVF is a fast-growing sector with high barriers to entry, which makes the asset attractive. For PE, the valuation question looks quite attractive.” Mankind, Dr Reddy’s and Blackstone have looked at BSV several times, including before the Advent acquisition. According to people in the know, DRL was evaluating the company even before the recent sale process began and has held bilateral discussions. Other companies such as Viatris (formerly Mylan) and Cadila Health have been named as potential suitors for BSV several times.