InvestorQ : What is the status of the stake sale in Aurobindo to Blackstone?
vidhya Laxmi made post

What is the status of the stake sale in Aurobindo to Blackstone?

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sarah Leo answered.
2 months ago
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As per latest reports that are coming in, the proposed sale of the injectables business of Aurobindo Pharma to Blackstone of the US may be in trouble. The proposed deal to sell the injectables business for around $4.5 billion has hit a new hurdle due to differences in valuations and outlook on the future of the business. Blackstone is one of the most reputed private equity funds and already has a fairly large exposure to India.

While others like Barings Private Equity were also in the fray, it was Blackstone that was seen as the front runner in the deal for the transaction. From the perspective of Aurobindo Pharma, the company was looking to unlock value. Post the due diligence, it looks like the deal structure proposed by Blackstone is not acceptable to Aurobindo and that is where the deal is stuck for the time being. Kotak Mahindra is the investment banker for the deal.

For Aurobindo Pharma ,the purpose of selling the injectables business is to unlock the hidden value in the business and partially monetize its injectables business. The problems actually got magnified after the US Food and Drug Administration (US FDA) inspected Unit VII, an oral manufacturing facility situated at Hyderabad. Post the inspection, FDA issued “Form 483” to the company with six adverse observations. That could be the roadblock.

Aurobindo sells generic pharmaceuticals, branded medicines and APIs in over 155 countries. It has a total of 26 manufacturing and packaging facilities approved by the relevant regulatory agencies including across the world. Its product portfolio has 7 baskets comprising of CNS, Anti-Retroviral, CVS, Antibiotics, Gastroenterological, Anti-Diabetics and Anti-Allergic. Aurobindo also has a strong R&D set up to back up the story.

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