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RPG Life Sciences announced the execution of a Business Transfer Agreement for the transfer of the Company’s Active Pharmaceutical Ingredients (API) business to RPG Active Pharma Limited (“RPG Active Pharma” or “RPGAP”), a wholly owned subsidiary of RPG Life Sciences, as a going concern on a slump sale basis.
The proposed transfer is part of RPG Life Sciences’ 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.
This business has been created at a time when the global pharmaceutical supply chains are undergoing structural realignment and India is increasingly emerging as a preferred destination for reliable, high-quality API manufacturing.
The Company has entered into an investment agreement to forge a strategic partnership with Inv Ascent, a healthcare-focused private equity investor, through an investment in RPG Active Pharma. The partnership brings together RPG Life Sciences’ pharmaceutical experience, manufacturing capabilities and execution track record with lnvAscent’s 20-years’ experience of investing in and scaling pharma businesses. Accordingly, funds managed by lnvAscent will make an initial investment of an
amount upto Rs. 243 er. in RPG Active Pharma.
The agreement envisages investments by the Company and lnvAscent upto Rs. 700 er. in RPGAP in tranches. The investment is expected to provide RPG Active Pharma with 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.
In addition, the RPG Active Pharma has also executed a Share Purchase Agreement for acquisition of 100% equity share capital of Actis Generics Private Limited – an API manufacturing company based in Visakha patnam. The proposed acquisition is expected to expand RPG Active Pharma’s manufacturing base, broaden its operating platform and support its strategic growth objectives.
The investment by India Life Sciences Fund – a life sciences focused fund – and the proposed acquisition of Actis Generics are intended to establish RPG Active Pharma as a focused API manufacturer for the next phase of RPG Life Sciences’ API growth. RPG AP will focus on augmenting its manufacturing capabilities, expanding its API portfolio and serving customers across domestic and international markets with a strong emphasis on quality, reliability and long-term partnerships. The transactions are subject to customary regulatory approvals and pre-closing conditions.
Commenting on the development, Ashok Nair, Managing Director, RPG Life Sciences, said: “Building a meaningful and scalable presence in AP/s 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. We are pleased to partner with lnvAscent, whose pharma investing experience and long-term partnership approach complements our vision for the business. The proposed acquisition of Actis Generics further strengthens this business and supports our ambition to build a high-quality AP/ business with expanded manufacturing capabilities, a broader product portfolio and the ability to create sustainable value for all stakeholders.”
Commenting on the partnership, Dr Jeevak Gupta, Managing Director, lnvascent, said: “We are excited to partner with RPG Life Sciences in building RPG Active Pharma into a differentiated AP/ business. RPG Life Sciences has established pharmaceutical capabilities, a strong operating foundation and a clear ambition to scale its AP/ business. We believe RPG AP is well positioned to benefit from the long-term growth opportunity in high-quality AP/ manufacturing, and we look forward to supporting the business through capital, strategic guidance and our healthcare sector experience.”
Khaitan & Co. acted as 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.
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