Blackstone, Bain agree India secondary sale

Blackstone made a reported 3x on the $112m sale of Emcure Pharmaceuticals to Bain Capital.

The Blackstone Group has sold its stake in Indian healthcare firm Emcure Pharmaceuticals in a secondary sale to Bain Capital, according to a company statement.

The firm did not disclose the financial details of the transaction, but local media reported that Blackstone sold the business for INR 7 billion (€82 million; $112 million), gaining a 3x return multiple on the sale. 

Blackstone and Bain could not be reached for further comment by press time.

Blackstone invested in Emcure in 2006 as its first India deal after the US alternative asset giant opened its Mumbai office in 2005.

“Emcure was the first private equity investment by a Blackstone managed fund in India. Since our investment, the company has significantly strengthened its position in the Indian pharmaceutical market and has established a strong presence in the US and other semi-regulated markets,” Amit Dixit, co-head of private equity at Blackstone India and a director on Emcure’s board, said in a statement.

“Thanks to its management team, the company’s revenues and profits grew significantly during our investment horizon. Going forward, we believe Emcure will continue to build on its strong platform and continue its rapid growth trajectory.”

In July this year, media reported that Emcure was planning to raise about $101 million in a public listing. However, Blackstone’s ultimate divestment to Bain Capital represents a growing trend of private equity firms selling to counterpart GPs as exits continue to be difficult in India.

Other secondary deals in 2013 include Kohlberg Kravis Roberts’ $500 million investment in Warburg Pincus-owned Alliance Tire, which was agreed in April. Also in April, Warburg invested in Indian manufacturing company AVTEC, which served as an exit for emerging market private equity firm Actis.

India's GPs are feeling increasing pressure to exit their investments as firms near the end of their holding periods, industry sources have said widely. 

However, Dixit was quoted in local media as saying, “This deal tells us that it is important to have patience, and holding power, in private equity investing. There was a time when Emcure was not marked as high as it is currently.”

Dixit became the firm’s co-head of India recently as Akhil Gupta, who was appointed chairman of Blackstone’s Indian private equity business in 2005 and given $1 billion to invest, stepped down to pursue other interests, PEI reported earlier this week. Dixit is joined by senior managing director Mathew Cyriac.

Blackstone currently has 19 people in its private equity team in India, spread across investments and operations, with nine in its real estate team. It has invested $1.7 billion of equity in 20 private equity transactions over the last eight years, according to the firm.