The $200 million investment will be carried out, pending regulatory approval, through both a preferential allotment of shares by Gland and KKR’s purchase of the entire existing shareholding in Gland currently held by Evolvence India Life Sciences Fund (EILSF).
“Our partnership with KKR will help us in our next phase of growth as we look to materially expand our manufacturing capacities and invest more in our development work with the goal of expanding our product registrations," said Gland founder and chairman P V N Raju.
KKR India chief executive Sanjay Nayar added, "Gland Pharma has a track record of strong financial performance as well as long-standing relationships with Indian and international pharmaceutical companies and we believe there is significant potential for it to grow these partnerships even further.”
The deal is the fourth announced investment from KKR’s Asian II Fund (described by Bloomberg as “the largest pan-Asian private equity pool of capital”) and its second overall private equity investment in India in 2013. It also marks the largest private equity investment yet in the Indian pharmaceuticals sector.
Amarchand’s Bangalore-based real estate and litigation partner Namrata Kolar reviewed the litigation and real estate documents pertaining to the deal, while Mumbai’s Nisha Kaur Uberoi provided competition law advice.
Simpson Thacher & Bartlett acted as international counsel to KKR. Ernst & Young Mumbai provided tax advice to KKR, while Ernst & Young Hyderabad and KPMG advised Gland and EILSF respectively.
The definitive agreements between KKR and Gland were signed on Wednesday. Following Competition Commission, Foreign Investment Promotion Board and other customary conditional approvals, the transaction is expected to close by the end of March 2014.