Cipla, Alkem Vie for SMT Acquisition

16 Oct 2024 , 11:29 AM

According to news reports, Cipla and Alkem Laboratories, two pharmaceutical companies, are leading candidates to purchase a majority share in Sahajanand Medical Technologies (SMT), the biggest producer of cardiac stents in India.

This comes after competing private equity firms TPG Capital, Apax Partners, and KKR withdrew their original interest.

Boundary proposals are likely by next Monday, and the deal is estimated to value SMT between Rs 3,500 and Rs 4,000 crore, according to news reports.

The Kotadia family, the company’s promoters, intends to retain a minority ownership following the sale in which other shareholders would likewise sell their stakes. After the deal, “they could retain about 15-20% stake,” one of the individuals mentioned above stated to ET.

Samara Capital and Morgan Stanley PE Asia jointly own 49% of SMT, with Kotak Pre-IPO Opportunities Fund holding 6% of the company. The remaining 45% is owned by the Kotadias.

According to the persons, if the shareholders don’t receive the required valuation from the stake sale, SMT is concurrently working on plans for a domestic public offering. They also mentioned that a company that goes public is probably going to get valued at a greater rate overall.

SMT had submitted a draft prospectus to the market regulator in 2022 in order to initiate an initial public offering (IPO) of Rs 1,500 crore; however, the plans were ultimately shelved.

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