London-based biopharma platform ZNZ Pharma 2, backed by an impact investment consortium comprising U.K.’s CDC Group and others, has bought 74% stake in Celon Laboratories, a specialty generics firm focussing on critical care and oncology.
Development Partners International (DPI) through its ADP III fund and the European Bank for Reconstruction and Development (EBRD) are the other investors behind the recently-incorporated platform that next plans to invest in Celon’s development of a new oral and injectable products manufacturing facility here. The company catered to India and emerging markets. The proposed facility will be for both critical care and oncology products and cater to a wider set of markets. It is and expected to receive an investment of ₹200 crore. The investment will be in addition to the the majority stake being acquired. Details of the greenfield facility such as land and capacity are expected to be finalised within one month, Celon managing director Middey Nagesh Kumar said.
To queries on the stake sale transaction, he said the company was valued at ₹485 crore. In terms of revenue, it had posted a turnover of ₹200 crore last fiscal and expected to close 2020-21 with ₹250 crore, he added. Sequoia Capital, which had invested in Celon, has exited in the acquisition by ZNZ Pharma 2.
In a release, announcing the acquisition, he said “we are excited about this partnership to drive the growth of Celon in the coming years. The primary investment by our new shareholders will help Celon expand its capabilities and capacities to match market opportunities in both therapeutic segments on a much larger, global scale.”
He said the biopharmaceutical platform is considering acquiring about 8-10 entities across the world, including a few in India, and strike synergies.
A CDC statement last week said the biopharmaceutical platform is a newly incorporated buy and build platform for the acquisition of pan-African biopharmaceutical businesses as well as a manufacturing and innovation centre of excellence in India. It is designed to compete in large, fast growing markets and high-demand, differentiated therapeutic areas through innovation and cost leadership. The platform has received an initial $250 million in capital from its founding investors and plans to raise up to an additional $500 million to execute on its industrial strategy and fund further acquisitions across Africa.
The $250 million have been used to fund the acquisition and combination of Egyptian generic drugs manufacturer Adwia Pharmaceuticals and Celon Laboratories. “The platform will leverage its manufacturing and R&D centre of excellence in India to strengthen its local manufacturing operations in Africa, while capturing synergies from centralised supply chain management and business development,” the statement said.
The platform company is co-founded by CEO Hocine Sidi-Said and Chief Strategy Office and Head of Corporate Development Alhadi Alwazir, both of whom have been inducted on the Board of Celon Labs. Citadel Management Consulting, a Hyderabad based mid-market investment banking firm was the advisor to Celon on the transaction.
