In an effort to strengthen its active pharmaceutical ingredients (API) business, has agreed to transfer its Active Pharmaceutical Ingredients (API) business to RPG Active Pharma Ltd, even as it has announced plans to acquire Actis Generics Private Ltd – a Visakhapatnam-based API manufacturing company.
RPG LS said it had executed a Business Transfer Agreement to transfer its API business to a wholly-owned subsidiary – RPG Active Pharma Ltd – as a going concern on a slump sale basis. The proposed transfer is part of RPGLS’s strategy “to create a focused API business with dedicated capital, sharper management attention and greater strategic flexibility, while the company also continues to build its formulations business,” it said.
The development comes at a time when global pharmaceutical supply chains are undergoing structural realignment and India is increasingly emerging as a preferred destination for reliable, high-quality API manufacturing, it said.
The company has also entered into an investment agreement with Inv Ascent, a healthcare-focused private equity investor, through an investment in RPG Active Pharma, it said. Funds managed by lnvAscent will make an initial investment of up to ₹243 crore in RPG Active Pharma, it added. “The agreement envisages investments by the company and lnvAscent up to ₹700 crore in RPGAP in tranches. The investment is expected to provide RPG Active Pharma the capital and strategic support required to strengthen manufacturing infrastructure, expand the product portfolio, enhance process development capabilities and pursue organic and inorganic growth opportunities,” it added.
RPG Active Pharma has also executed a Share Purchase Agreement to acquire 100 per cent equity in Actis Generics Private Ltd, the company said. RPGLS management told businessline on Wednesday that the company was scouting for a manufacturing facility for APIs or formulations.
RPG AP will focus on augmenting its manufacturing capabilities, expanding its API portfolio and serving customers across domestic and international markets, it said. The transactions are subject to customary regulatory approvals and pre-closing conditions.
Ashok Nair, Managing Director, RPG LS, said: “Building a meaningful and scalable presence in APIs has been a strategic priority for RPG Life Sciences. RPG Active Pharma gives us a focused business to pursue this opportunity with greater speed, discipline and scale….The proposed acquisition of Actis Generics further strengthens this business and supports our ambition to build a high-quality API business with expanded manufacturing capabilities, a broader product portfolio and the ability to create sustainable value for all stakeholders.”
Dr Jeevak Gupta, Managing Director, lnvascent, added that RPG AP was “well positioned to benefit from the long-term growth opportunity in high-quality API manufacturing.”
Khaitan & Co was the legal counsel and structuring advisor to RPG group for the investment transaction. o3 Capital acted as an exclusive financial advisor, Quillan Partners acted as legal counsel and Deloitte undertook financial due diligence on the acquisition of Actis by RPG Active Pharma, the company said.