Zydus cadila animal health business sold to multiples alternate asset management-led consortium

INDIA – Cadila healthcare and its wholly-owned subsidiary Zydus Animal Health and Investment has completed sale of its animal healthcare established markets undertaking to Multiples Alternate Asset Management-led consortium for (US$391,667) Rs 2,921 crore.

Zydus Animal Health and Investment entered into a definitive pact for sale of its animal healthcare established markets undertaking to Multiples Alternate Asset Management-led consortium.

This deal involves transfer of immovable assets, movable assets, inventory, brands and intangible assets, contracts, licenses and permissions, business records, employees along with employee benefit funds, insurance policies, other assets and assumed liabilities.

The consortium, including Canada Pension Plan Investment Board and RARE Enterprises, agreed to purchase the undertaking through a special purpose vehicle (SPV) controlled by them, in the name of Zenex Animal Health India.

Zydus further informed that Zydus Animal Health Limited will continue to pursue business opportunities in US and certain European countries through Animal Healthcare Emerging Markets Undertaking, which is not part of the transaction.

For the financial year 2019-20, the Animal Healthcare Established Markets Undertaking had reported a turnover of (US$68786) Rs513 crore representing 4 per cent of the consolidated turnover and EBIDTA of (US$11,746) Rs87.6 crore representing 3 per cent of the consolidated EBIDTA of the parent, Cadila Healthcare Limited.

The net worth of the unit was placed at (US$295473) Rs2,203.6 crore as on March 31, 2020, which represents 21 per cent of the consolidated net worth of the parent company.

Zydus Animal Health Limited informed that it had initiated the process to look for strategic and/or financial partners with an intention to invite them to take equity stake in ZAHL.

“During the process, Zydus Animal Health Limited realized that the preference of the investors was to get majority or total and absolute control of the business of its Animal Healthcare Established Markets Undertaking (rather than becoming a significant minority partner in Zydus Animal Health Limited). In view of the foregoing, Zydus Animal Health Limited found it commercially prudent to transfer the Undertaking to the Purchaser,” it said.

As at 2019, the global Animal Health market was estimated at US$48.56 billion and the growth is expected to continue at a compound annual growth rate of 8.7% up until 2026 where it is estimated to be approximately, US$ 87.07 billion, this is data from Facts and Factors.

A huge increase in global consumption of protein food, as well as an increase in the incidence of zoonotic and food-borne diseases, is driving the market.

For Zenex Animal Health India, this is a move that will see them better tap into the huge animal health market.

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