Bharat Serums: Advent set to buy controlling stake in Bharat Serum


Private equity group Advent International is buying a controlling stake in Mumbai-based biopharma company Bharat Serums and Vaccines (BSV), valuing the company for $500 million (Rs 3500 cr). A formal announcement is expected later today.

Kotak PE and OrbiMed together that hold 23% stake in BSV are exiting through this sale. The rest of the stake is with the Daftary family who are relinquishing control but will stay on as a minority partner, said people in the know. Advent will become the largest shareholder in the company.

The two year-long sale process had attracted a consortium of Carlyle and Zydus Cadila, Mankind Pharma and Chrys Capital but Advent became the sole contender in the final stages, ET reported on June 21.

Founded by Dr. Vinod G. Daftary in 1971, BSV is presently run by his sons Bharat Daftary (Chairman & MD) and Gautam Daftary who is the managing director.

Advent declined to comment. Daftary was not available for comment.

The founders had earlier planned a Rs 2,000 crore initial public offering two years ago, but the exercise was called off later. BSV was valued at Rs 6,667 crore then, ET reported in December 2017. Subsequently, they had mandated Jefferies to launch a formal sale process for a controlling stake.

BSV competes with Serum Institute of India, Biological E, Panacea Biotec and Shantha Biotechnics in India, and employs 900 people. It sells its products in India and in more than 45 countries.

The company’s revenue was Rs 705 crore in FY18 against Rs 620 crore in FY17, with a profit of Rs 74 crore, up from Rs 40 crore. Total debt decreased to Rs 124 crore in FY18 from Rs 154 crore. There were growth projection- and revenue-related queries raised during the due diligence stage and hence a lot of interested bidders walked away, said one of the persons cited above.

Kotak PE invested in the company from its second fund in 2012. For Orbimed, investment in Bharat Serum in 2010 was For Orbimed, investment in Bharat Serum in 2010 was its second deal in the country and the investment has run its course. The fund life is now coming to a close and hence the need to exit.

India’s biotechnology sector, growing at 20%, was at $11.6 billion in 2017, with the biopharma sector accounting for 65% of total revenue.


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