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Goldman Sachs set to buy 33% stake in GVK Bio at Rs 7,300-crore valuation

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 clientele
GVK 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 persified clientele, medium-to-long term contracts with customers and continued client addition, which helps support revenue as well as widens its customer base.

( Originally published on May 16, 2021 )

Blackstone, General Atlantic eye 74% stake in Karvy Computershare

MUMBAI: Big bracket global private equity funds Blackstone Group LP and General Atlantic are in separate talks to purchase around 74% stake in India’s largest share registry company Karvy Computershare for roughly Rs. 2,100 crore, two people with direct knowledge of the plan said.

Australian share registry company Computershare, which owns half of the company, will sell its entire stake while Indian partner and owner of financial services firm Karvy Group C Parthasarathy will sell 24%. “Australian partner Computershare is looking at exiting its India business.

It will sell its 50% stake through this transaction,” one of the two persons quoted above said. “C Parthasarathy will also cede a significant minority stake to give the incoming investor a larger stake and control of the board.”

The deal once concluded, will value the company at around Rs. 2800 crore. An email questionnaire to the spokespersons of Computershare and C Parthasarathy did not elicit any response.

In emailed responses, both the spokespersons for General Atlantic and Blackstone said it will not comment on market speculations.

Founded in 1983 by C Parthasarathy, Karvy Computershare is one of the largest share registrar servicing over 70 million investor accounts spread over 1300 issuers including banks, PSUs and mutual funds.

Karvy employs 4,000 people across 203 branches. This will be the second time Karvy Group is looking to draw in PE investors for a stake in one of its businesses. ICICI Venture and Baring Asia had invested in Karvy Stock Broking some time back. Karvy Computershare competes with CAMS, Link Intime, Big Share Services and Integrated Enterprises in the country.

The National Stock Exchange purchased 45% in CAMS from global buyout fund Advent International in 2013.

Financial services has been a go to sector for private equity investors as the sector gives one a direct exposure to the country’s growth and its consumption patterns.

Despite slowdown in key heavy industries, financial services has been sustained by high home loan growth, credit card spends and consumer loans. Consultants say the financial services sector will continue to attract private equity investors as the current market buoyancy will continue in future.

“The financial services sector continues to see significant investor interest, both on fund and fee based targets,” said Sanjeev Krishan, executive director and head private equity advisory services at PwC India

( Originally published on May 19, 2017 )

General Atlantic in talks to buy 74 per cent stake in Karvy Computershare

MUMBAI: Global private equity fund General Atlantic is in advanced talks to purchase a stake of about 74% in India’s largest share registry company Karvy Computershare for roughly Rs 1,500 crore, two people with direct knowledge of the plan said.

Australian share registry company Computershare, which owns half the company, will sell its entire stake while Indian partner and Karvy Group owner C Parthasarathy will sell around 24%, the people said.

“Genreral Atlantic has signed an exclusivity agreement with the promoters of the company after it emerged as the highest bidder for the controlling stake, beating its global peer Blackstone,” said one of the persons. ET first reported the deal to sell a majority stake on May 19.

Australian partner Computershare is contemplating the move as part of its global strategy of exiting non-core businesses. “It will sell its 50% stake through this transaction while C Parthasarathy will cede a significantly minority stake to give the incoming investor a larger stake and control of the board,” said one of the persons cited above. The deal, once concluded, will value the company at around Rs 2,000-2,100 crore.

The spokesperson for General Atlantic declined comment while the spokespersons for Karvy and Computershare did not respond to emailed queries. Founded in 1983 by Parthasarathy, Karvy Computershare is one of the largest share registries servicing over 70 million investor accounts across 1,300 issuers including banks, public sector units and mutual funds. Karvy employs 4,000 people at 203 branches.

This will be the second time Karvy Group is looking to draw in PE investors for a stake in one of its businesses. ICICI Venture and Baring Asia invested in Karvy Stock Broking some time back. Karvy Computershare competes with CAMS, Link Intime, Big Share Services and Integrated Enterprises in the country.

NSE purchased 45% in CAMS from global buyout fund Advent Intl in 2013. PE investors have been keen on financial services in India. Despite a slowdown in key heavy industries, financial services have been sustained by high home loan growth, credit card spending and consumer loans.

Aspiring TikTok buyers pursue four options in effort to revive talks

TikTok‘s prospective buyers are discussing four ways to structure an acquisition from its Chinese owner ByteDance, which include buying its U.S. operations without key software, after Beijing stalled a deal which could be worth $30 billion, sources said.

Other options being considered include asking for Chinese approval to pass TikTok’s algorithm on to the acquirer of the short video app’s U.S. assets, licensing the algorithm from ByteDance, or seeking a transition period from a U.S. national security panel overseeing the deal, three sources said.

ByteDance had been looking to pick a buyer for TikTok assets by this week so it can finalize a deal by mid-September and comply with President Donald Trump‘s order to pest them, after U.S. officials raised concerns over the safety of the personal data of U.S. citizens handled by TikTok.

“TikTok is loved by 100 million Americans because it’s a home for entertainment, self-expression, and connection. We’re committed to continuing to bring joy to families and meaningful careers to those who create on our platform for many years to come,” a TikTok spokeswoman said in a statement.

Beijing last week updated its export control rules to restrict the sale of technology such as the one used by TikTok to recommend videos to users, raising questions over whether it would veto a deal and giving prospective buyers Microsoft and Oracle pause for thought.

ByteDance and the bidders for the TikTok assets are now discussing four ways to structure the deal, the sources, who requested anonymity, told Reuters.

It is not clear which, if any, of the options will be pursued. As days pass, the odds of a deal lengthen as TikTok faces a U.S. ban on Sept. 20 if no sale agreement has been reached. It has challenged this ban in court.

One possibility being discussed is to sell TikTok without the algorithm it uses to make recommendations to users. While this would circumvent China’s export control rules, it would present a significant gamble for Microsoft and Oracle, which would have to quickly come up with a substitute.

Another option is to negotiate a transition period of up to a year with the Committee on Foreign Investment in the United States (CFIUS), which is overseeing the deal talks, the sources said. It is not clear, however, whether China’s new rules would allow this in the time frame required.

A third option is seeking approval from China to pass on TikTok’s algorithm to the buyer of its U.S. assets, the sources said. This would amplify the geopolitical risk, given worsening relations between the world’s two largest economies over trade, cyber security and the spread of the coronavirus.

The fourth scenario involves ByteDance licensing the algorithm to the buyer of the TikTok assets, the sources said. However, this could worry CFIUS, which wants ByteDance to forego any relationship it has with TikTok in the United States.

ByteDance, Microsoft and Oracle declined to comment. The White House, CFIUS and China’s Commerce Department did not immediately respond to requests for comment.

TikTok is functionally and technically similar to ByteDance-owned Douyin, which is available only in China, and shares technical resources with it and other ByteDance-owned properties, sources have previously said.

While the code for the app, which determines the look and feel of TikTok, has been separated from Douyin, algorithms for moderating and recommending content and the management of user profiles are shared.

DANCE TRACKED?
While TikTok is best known for videos of people dancing going viral among teenagers, U.S. officials have expressed concern that user information could be passed to Beijing.

TikTok has said it would not comply with any request to share user data with the Chinese authorities.

ByteDance has been in talks to sell TikTok’s North American, Australian and New Zealand operations since last month. And in a sign of founder and CEO Zhang Yiming’s concern, TikTok engineers were told last week to make contingencies should it need to shut down its U.S. operations.

Walmart Inc said last week it was joining Microsoft in its bid for TikTok’s U.S. assets, hours after the app’s recently named chief executive, Kevin Mayer, said he would step down.

Oracle, whose Chairman Larry Ellison is one of the technology world’s few supporters of Trump, has partnered with some of ByteDance’s investors, including General Atlantic and Sequoia, on its bid for the TikTok assets.