Pharma Industry

kkr: Four brands made JB Chemicals a prize catch for KKR. Next, the PE firm needs to belt out new hits.

4 years ago

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Synopsis

The pharma company has robust financials and a decent corporate-governance record, but the cherries on the cake are four big brands, which account for 80%-85% of the company’s domestic formulations business. The game changer for KKR will be to leverage its connections and create lucrative revenue streams beyond the big four.

JB Chemicals and Pharmaceuticals, a relatively reserved drug maker, has come into the limelight, with global private-equity (PE) firm KKR set to acquire a 54% stake in the company at INR745 per share. This will trigger an open offer for another 26% stake, but KKR will cap its overall holding at 64.9%. Until a year ago, PE firms buying controlling stakes in Indian pharma companies was unheard of. But in the last few months, the JB Chemicals-KKR

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