New Delhi India’s healthcare and pharmaceutical sector witnessed hectic deal activity in the first six months of this calendar year with merger and acquisition (M&A) value hitting record highs and totaling $3.35 billion in 2021 exceeded the value of the deal.
According to VCCircle’s data and intelligence platform VCCEdge, the M&A deal value in the sector reached $4.32 billion during January to June, compared to $2.02 billion in the same period last year. In the second half of last year, the M&A deal value came in at $1.33 billion.
The number of M&A deals during this period also increased from 47 in the first and second half of the previous year to 53.
The record M&A deal value in the region was largely due to Biocon Biologics’ definitive agreement in February to buy Viatris Inc.’s global biosimilar portfolio for $3.34 billion. The deal got approval from the Competition Commission of India (CCI) last month. Biocon Biologics, a unit of Biocon Limited, is backed by Abu Dhabi-based state arm ADQ and private equity firms such as True North and Tata Capital.
In another big-ticket M&A deal in the space during this period, drugmaker Mankind Pharma Ltd has agreed to buy Panacea Biotech’s formulations business in India and Nepal for $249 million.
Ramesh Kannan, partner, Somerset Indus Capital Partners, a healthcare-focused private equity firm, said there is a very clear direction towards aggregation, consolidation and larger deal sizes in the healthcare and pharmaceuticals space in India.
“The deal momentum will continue as more foreign companies interested in strategic transactions are coming in,” Kannan said. However, evaluation will be a challenge, he said.
Private equity dealmaking in the healthcare and pharmaceuticals sector also remained strong as the deal value increased from $2.75 billion in the first six months of this year to $2.96 billion during July-December 2021. However, the deal value was less than $3.31 billion. last year’s period.
Private equity deal volume also fell from 98 in July-December to 83 in the first half of this year and 85 in January-June 2021. This was still higher than the 71 registered in the first half of 2020.
The value of the private equity deal during this period was propelled primarily by two big-ticket transactions in the healthtech segment. The first was Bain Capital’s agreement to invest $960 million in Citius Tech. In another major private equity deal in the healthtech space, Bioformis snagged $300 million as part of its Series D funding round led by private equity firm General Atlantic.