Fosun Pharmaceutical Group Co. intends to acquire 86.08% of Indian drugmaker firm Gland Pharma Limited, backed by KKR & Co. L.P. (NYSE:KKR) in a deal valued around $1.26 billion. As per the latest update, Fosun Pharma intends to borrow funds amounting to $800 million from leading financial units to complete the purchase. The deal, largest acquisition of an Indian firm by a Chinese entity, would enable acquirer to get control of a new set of injectable medicines along with manufacturing facilities in India.
The industry scenario
The global pharmaceutical industry has been witnessing flurry of deals as the companies intends to develop their expertise in growing areas, and plans to enter new markets. So far in this year, Chinese companies have reported over $3.9 billion in overseas deals in the biotechnology, health-care and pharmaceutical sectors, a tenfold jump from the funds spent in 2012.
A couple of months ago, Fosun Pharma, backed by GuoGuangchang, reported that it had proposed a non-binding offer to acquire 96% of Gland Pharma, which is backed by KKR & Co. Chen Qiyu, the Chairman of Fosun, and one of the leading buyers in Chinese health-care industry, stated last year that he expected to improve overseas revenue to almost 40% of the total revenue over the coming 5 years through acquisitions.
A couple of days ago, KKR & Co. released its 2Q2016 results wherein it reported that GAAP net income attributable to company’s common unit holders was $93.9 million for the second quarter in FY2016, compared to $376.3 million in the comparable period of FY2015. Monetization initiatives in Private Markets and Principal Initiatives resulted in post-tax distributable earnings of $508 million in 2Q2016. Assets under Management stood at $131 billion, up 14% compared to same period in last year. Book value came at $9.1 billion as of end of June 2016.