French biotech major Mérieux Alliance has acquired a majority stake in the Hyderabad-based vaccine company Shantha Biotechnics for an undisclosed amount.
The company has acquired a 50 per cent stake belonging to a group of Omani investors and another 10 per cent from a team of non-resident Indian investors, taking its total stake in Shantha Biotechnics to 60 per cent.
The deal is a strategic investment by the French company to strengthen its presence and manufacturing activities in Asia.
Confirming this, Shantha Biotechnics Managing Director Varaprasad Reddy told Business Standard that the Omani investors had sold their entire 50 per cent stake to Merieux Alliance at a valuation decided between them and the French company.
"With this deal, Shantha Biotechnics' business is set for a major expansion in the Asian markets. The French major will focus on these markets through Shantha Biotechnics' manufacturing and marketing arms," he added.
Though the value of the transaction was not disclosed, industry analysts said Shantha Biotechnics, which posted a turnover of Rs 90 crore (Rs 900 million) last year, was valued at $175 million (about Rs 648 crore -- Rs 6.48 billion) by Morgan Stanley recently.
Hence, the approximate valuation for 60 per cent of its stake could be in the range of $105-110 million (Rs 380-400 crore or 3.8-4 billion).
Currently, Reddy, promoter and managing director, Shantha Biotechnics, holds a 16.7 per cent stake in the company.
Though his initial stake was 18 per cent, it was diluted following the issue of 1.3 per cent equity as employee stock options. The remaining 23.5 per cent is held by Reddy's friends and associates.
Asserting that this was not a "hostile takeover", Reddy said Shantha Biotechnics and Mérieux had a common vision of providing worldwide public healthcare services. After the divestment, Reddy will continue as the managing director of the company.
Abhey Yograj, founder of Gurgaon-based Tecnova India, is stated to have played a vital role in bringing Shantha Biotechnics and Merieux Alliance together for the deal.
Stating that Shantha Biotechnics would now become his group's worldwide decision centre for its prophylactic vaccine activities, Alain Merieux said Reddy would continue to play an "important role in developing the activities of Mérieux Alliance".
Georges Hibon, a director of bioMérieux, will take over as chairman of the acquired company.