InvAscent looks to exit Aizant Drug at $350 400 mn valuation

Healthcare focused private equity firm InvAscent is looking to sell its stake in Aizant Drug Research Solutions Pvt. Ltd in a deal expected to value the drug development company at $350 400 million. So far, InvAscent has pumped in $18 million in the Hyderabad based company. It is now expecting to sell a controlling stake in Aizant, with the promoters retaining stake, three people with knowledge of the development said.

“Private equity funds have been reached out to for a controlling stake sale," one of them said. Global investment bank Rothschild has been appointed to look for buyers, another person said. “The (information memorandum) were sent out last month," this person said. Spokespersons for Aizant and Rothschild did not reply to emailed queries.

A spokesperson for InvAscent confirmed the appointment of Rothschild for the stake sale, but did not provide more details. InvAscent and Pearl Lane together picked up an undisclosed stake in Aizant in 2017 from PE fund Zephyr Peacock. Zephyr continues to hold a stake in the company, apart from the promoters, including chairman and managing director Dr.

Varma Rudraraju, and a few angel investors. Aizant, which began operations in 2008, provides drug development services and has a proprietary portfolio of specialty generic medicines. It also provides bio analytical services, clinical services, and manufacturing services. The company’s manufacturing and clinical facilities are approved by regulators in the US, Canada, Europe, Brazil, Russia, China, Australia and Africa, according to information on InvAscent’s website.

Aizant’s revenue in FY2022 23 rose to 190.6 crore from 168.8 crore in the previous financial year, India Ratings said in a report in June based on the company’s provisional financials. Aizant broadly operates four segments–clinical research, formulations, internal products, and contract manufacturing operations (CMO), which includes services from drug development to manufacturing.

“While revenue from the clinical research segment and the formulations segment recovered in FY22, that from the internal products segment remained stagnant," India Ratings said in its report. The agency added that it expected Aizant’s revenue to “grow further in the medium to long term due to an increase in the capacity in the clinical research segment, higher execution of CMO, and a consistent demand from the formulation and internal products segments." InvAscent is the investment adviser to a family of funds that operate under the name India Life Sciences Fund.

It has so far raised about $500 million from global investors across three funds and deployed the amount in 35 companies across pharma, healthcare delivery, healthtech, medical devices, and animal health industries. The PE firm is currently deploying from its fourth fund (India Life Sciences Fund IV).

Research firm Mordor Intelligence estimated revenue from India’s pharma contract development and manufacturing industry at $15.6 billion in 2023, lower than China’s $27.1 billion, as per a Reuters report in November. Mordor, however, estimated revenue from the industry to grow, on average, at more than 11% annually over the next five years, compared with a pace of about 9.6% for China..