Goldman Sachs set to buy 33% stake in GVK Bio | Economic Times

Goldman Sachs’ private equity arm is set to buy about 33% in Hyderabad-based GVK Biosciences, valuing the company at ₹7,300 crore ($1 billion), multiple people aware of the development said.Existing shareholder ChrysCapital will sell its 17% stake, while promoters will dilute about 16%, they said. Jefferies has been advising the PE fund and promoters on the sale process. A formal announcement is expected in the coming weeks, the people said.ET was the first to report in January that bulge bracket private equity funds including a fund managed by the Wall Street investment bank had been shortlisted for acquiring a minority stake in GVK Bio. The other contenders included Carlyle Group, Warburg Pincus, General Atlantic and Quadria Capital, as well as Singapore’s Temasek Holdings.This will be Goldman Sachs second investment in the India pharma sector in the last six months, after it invested $150 million in Biocon Biologics, the biosimilar arm of Biocon, in November last year, and shows the growing heft of pharma and healthcare as a key investment theme amidst the global Covid-19 pandemic. Spokespersons for Goldman Sachs and ChrysCapital declined to comment.DS Brar, the chairman of GVK Biosciences, did not respond to ET’s email till press time Sunday.Diversified clienteleGVK Bio — co-promoted by the GVK Group and DS Brar, the former CEO of Ranbaxy Laboratories — is a global contract research and development organisation.The company has a team of over 2,500 scientists and is engaged in integrated drug discovery, chemistry, biology, large molecule R&D, chemical development, formulation and analytical development, contract manufacturing and drug repurposing.For financial year 2020, it posted revenue of ₹950 crore, with earnings before interest, tax, depreciation and amortisation of ₹275 crore. Half of its revenue comes from drug discovery research while contract manufacturing, which includes active pharmaceutical ingredients (APIs), contributes the rest.In 2014, it acquired Aragen Bioscience, a US-based preclinical CRO specialising in biologics services, enabling its clients to access an integrated R&D services platform across both large and small molecules. After the merger in 2017, the business is being rebranded as Aragen Life Sciences. “The next step will be to integrate our seven global sites, web and social media presence, emails, along with several other initiatives, into the new brand. We will be officially launching the brand on May 26, 2021,” the company had said in December.GVK Bio benefits from a diversified clientele, medium-to-long term contracts with customers and continued client addition, which helps support revenue as well as widens its customer base.