Morgan Stanley, the investment bank hired by private equity firms Sequoia Capital and Actis to find buyers for the 70 percent stake they hold in Paras Pharmaceuticals, has secured bids from five different companies for the Ahmedabad-based drug maker, according to a report in India's Economic Times.
The five are drug maker Pfizer, UK-based GlaxoSmithKline (GSK), French company Sanofi Aventis, and Japan’s Daiichi Sankyo and Taisho Pharma.
Citing information from a memorandum given to potential buyers, The Times reported that existing investors were asking for about $700 million, valuing the company at $1 billion. According to an anonymous source speaking to The Times, Morgan Stanley’s decision to approach international bidders was due to the belief that the asking price for Paras was beyond the reach of local companies.
Sequoia and Actis declined to comment.
Paras Pharmaceuticals counts several household names among its brands including pain relief ointment Moov, cold and cough medicine D’Cold, and prickly heat powder Dermicool. The company currently sells its products in parts of Asia and the Middle East and North Africa.
Actis had invested $42 million in Paras in October 2006. Sequoia followed a month later with $12 million.
India’s pharmaceutical industry has seen plenty of investor interest in recent months.
In April, Hong Kong-based AIF Capital invested INR1.75 billion (then €29.2 million; $39.5 million) in Famy Care, an Indian pharmaceutical company, for an undisclosed minority stake.
In August, Baring Private Equity India made its second commitment to India’s pharmaceuticals sector when it committed INR700 million (€11.6million; $15 million) to Shilpa Medicare. It had invested $15 million in integrated drug discovery and development company Sphaera Pharma in 2008.