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Corporate - Mergers & Acquisitions


Jubilant to sell 10.4% stake to Citigroup, Henderson — To fund acquisition in the US

Ambarish Mukherjee

New Delhi , Nov. 10

JUBILANT Organosys Ltd is selling a part of the company's equity through private placement to the Citigroup and the Henderson group for Rs 225 crore to fund its planned acquisition in the US.

Though Jubilant is yet to finalise its acquisition in the US, informed sources said that a core team within the company is already studying details of a number of US pharmaceutical companies whose business profiles could be a "strategic fit" with Jubilant's overseas ambitions.

Jubilant Organosys announced on Wednesday that two global investors - CVC International (a unit of Citigroup Global Investments) and HPC Mauritius Ltd (a unit of Henderson Investment Management) - would be picking up around 10.4 per cent equity in the company through private placement on a preferential allotment basis.

While Citigroup would be chipping in Rs 135 crore for 16.36 lakh equity shares, the Henderson unit would be investing Rs 90 crore for 10.09 lakh equity shares of the company. Jubilant would be making the preferential allotment of equity shares (with a face value of Rs 5 each) to the foreign investors at a price of Rs 825 per share and a lock-in period of one year.

Informed sources told Business Line that the company had been looking at the US market for acquisitions for more than six months now and was awaiting some fund infusion before moving ahead with its plans.

"Now that the company would have the funds, it is likely to move fast on the acquisition front also, because the teething problems of its earlier European acquisitions are also getting over," sources said.

Commenting on the private placement of equities with Citigroup and Henderson, the Chairman and Managing Director of the company, Mr Shyam S. Bhartia, said that the company's "growth outlook remains strong and the raising of further capital will strengthen our financial structure enabling us to rapidly pursue and implement our corporate initiatives. We are delighted to have high quality investors like Citigroup and Henderson as equity holders in the company. The funds raised will be deployed to augment our growth platform, which should resultantly create incremental value for all our shareholders."

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