Sanofi sells India nutraceuticals unit to Kedaara-backed firm

The Indian unit of French pharmaceuticals maker Sanofi said it decided to sell its nutraceuticals business Universal Nutriscience Private Ltd for Rs 587.0 cr ($80 mln) plus debt-like obligations such as retirals and provisions for sales returns.

Universal Nutriscience is a joint venture between Kedaara Capital Fund II LLP and Universal Medicare Private Limited.

The Nutraceuticals business of the company comprises 16 brands and 30 stock keeping units, including the SEACOD brand of cod liver oil and various multi-vitamin tablets.

These along with related business assets and liabilities including contracts, intellectual property rights, inventory, and all employees associated with this business will transition to Universal Nutriscience Private Limited, the company said.

“The Company is striving to drive long term growth, while ensuring sustainable access for patients to its medicines by developing new business models, leveraging technologies, and simplifying its portfolio.

“Following a strategic review of its portfolio, the Company believes that its nutraceutical range would be best suited for a company that has the vision, strong heritage and a deep understanding of this category. Accordingly, the Board of Directors has decided to divest the Nutraceuticals business..”

Sanofi India said this decision will help it “invest and focus on its strategic growth pillars”, while allowing the nutraceuticals business to “benefit in a company specialized” in that area.

The Company said it undertook a “thorough competitive auction process” with a view to obtain the best possible transaction terms and identify an organization which will be a good fit for the Nutraceuticals business.

“As a part of this process, various players had expressed their interest in the proposed acquisition.

“The Board of Directors had evaluated potential bidders for the sale of the Nutraceuticals business and after evaluating the various bids received and discussions with the potential buyers, the offer proposed by Universal Nutriscience has been identified as being in the best interest of the Company and the stakeholders, from the perspectives of valuation and strategic fit.”

The deal is expected to close within the next 3 months.

Under the Companies Act, 2013, shareholder approval is required for a divestment of an undertaking if the investment of the Company exceeds 20% of its net worth as per the audited balance sheet of the preceding financial year or the undertaking generates 20% of the total income of the Company during the previous financial year.

However, the divested business contributed only 5% of Sanofi India’s sales and net worth, and therefore no shareholder vote will be called.

Sanofi is a French multinational pharmaceutical company headquartered in Paris, France, and one of the world’s top pharmaceuticals manufacturers.

It focuses primarily on the prescription market, but also develops over-the-counter medication.