Creador exits Indian pharma player to ChrysCapital
08.04.21 / Author: Tim Burroughs
Creador has completed a third exit – with a 3.7x multiple and a 32% IRR – from its third South and Southeast Asia-focused fund, selling minority position in Indian pharmaceutical company Corona Remedies to ChrysCapital.
ChrysCapital paid INR6.7 billion ($90 million) for a 30% stake, of which 20% came from Creador and 10% from the promoter group, The Economic Times reported ahead of the official announcement. VCCircle subsequently reported that the transaction involved a 27% interest.
Creador invested INR1.18 billion in Corona in 2016, according to a statement. The exit – for which the multiple and IRR are given in US dollar terms – means 15% of the Fund III corpus has now been realized. The vehicle closed at $415 million in 2016. The private equity firm is currently deploying its fourth fund, which closed at $580 million in 2019.
Founded in 2004 by Dr. Kirtibhai Mehta and his two sons, Corona is a leading domestic formulations, or generics, specialist. It produces treatments for cardiovascular, gastrointestinal, gynecological, and respiratory conditions, as well as for diabetes, pain relief, and infections. The company built up its portfolio in part through acquisitions from GlaxoSmithKline and Abbott Laboratories.
During Creador’s holding period, revenue and EBITDA grew 2.6x and over 8x, respectively. Corona also rose from 59th to 37th in India’s pharma industry by market share. Recent activity includes the acquisition of a minority stake in active pharmaceutical ingredients (API) manufacturer La Chandra Pharmalab.
“Corona’s market-beating growth is a result of strategic focus on identifying gaps in the market and focus on affordability,” said Nirav Mehta, one of the sons. “Corona’s brand strategy has been a stellar success as several of its brands have moved into the top five in the relevant therapeutic area. With Creador’s support, the company has expanded it presence across India and has also entered into new therapy areas through a combination of organic and inorganic routes.” Private equity investment in India’s healthcare sector reached $3.79 billion in 2020, more than twice the 2019 total. More than 70% of the capital went into pharmaceuticals. Among the major recipients were formulation and API companies, which last year were said to be transacting at valuations of 15-20x and 7-10x EBITDA, respectively, up from the commonly single-digit ranges of 3-4 years earlier.