Torrent Pharma In discussion with CVC, Bain Capital To Raise Cash For Cipla Buyout

Torrent Pharmaceuticals is in talks with private equity firms CVC Capital Partners and Bain Capital to raise cash for a stake in Cipla. The Indian pharmaceutical company intends to fund up to $1.5 billion in order to bid for Cipla. Torrent is working hard to execute a deal that will give the company a strategic stake in Cipla. The transaction could become one of India's largest pharma transactions in history. Torrent and Blackstone are among those interested in buying a share in Cipla, India's third-largest drugmaker by revenue, in what could be India's largest pharma deal ever. Cipla's founding family is also keen to sell their 33.4% holding entirely.

A successfull bidding will pave way for another 26% stake, as per Indian regulations. If this happens, it will translate to a $6.75 - $7 billion deal, Bernstein estimated in an Aug. 30 report. Torrent and Blackstone both have submitted non-binding bids for Cipla, as per reuters. Cipla also has a sizable share of pharmaceutical exports to North America and South Africa. It mostly sells medications to treat ailments such as the common cold, fever, and headaches. The Indian company competes directly with global market leaders such as Pfizer and Abbott. Torrent's market capitalization is 54% less than Cipla's ($11.9 billion). Its business is present in over 40 countries and principally serves patients who require drugs for diabetes, pain management, gynecology, oncology, and anti-infective segments.

Foreign banks such as Morgan Stanley and Barclays have also expressed interest in the pharmaceutical deal. The two are in talks with Torrent about possible loan financing for the transaction. Barclays and Morgan Stanley made no official statements. Instead than just a financial backer, Cipla hopes to bring on a strategic partner, such as Torrent. The ultimate decision, however, has yet to be made.