ICICI Venture buys Ranbaxy business

ICICI Venture, the venture capital arm of ICICI Bank, is learnt to have acquired the Rs 125 crore (Rs 1.25 billion) allied business consisting of diagnostics, fine chemicals and animal health divisions, for an undisclosed amount.

The company has even started negotiating with a few other pharmaceuticals and diagnostic companies in India -- including the Ahmedabad-based Cadila pharmaceuticals -- to run Ranbaxy Laboratories' non-core businesses since it does not want to run it on its own.

Ranbaxy Laboratories, the country's largest pharma company, has made an exit from the allied businesses as part of a strategy to focus on its core competence.

The non-core or allied business of Ranbaxy contributes less than 10 per cent to its total revenue of Rs 3,474 crore (Rs 34.74 billion).

Raghu Kochar, director (corporate communications), Ranbaxy Laboratories, neither denied nor confirmed the fact that the non-core business has been sold to ICICI Venture.

However, sources in ICICI Venture, told Business Standard the company has acquired the allied businesses of Ranbaxy and it is scouting for a player to sell off the business.

Renuka Ramanathan, managing director, ICICI Venture and Alluri Sreenivasan, who was overseeing Ranbaxy deal, were not available for comments.

Among the allied businesses of Ranbaxy, the veterinary division accounts for the major chunk of the revenue. The animal health division mainly caters to three segments -- poultry, livestock and petcare.

While Ranbaxy's fine chemicals division has an active presence in the specialty chemicals and re-agents (solvents and analytical chemicals) markets in India, its diagnostic business mainly deals with products licensed from multinational technology companies.

Kochar said the company was currently talking to interested parties on the proposed deal.

"The allied business divisions are still an integral part of Ranbaxy Laboratories as no sales deal has been finalised yet. I cannot comment on the market speculations at this point of time," he told Business Standard.

ICICI Venture which is currently managing funds in excess of $400 million is learnt to be negotiating with the Indian pharma major to buy out these three allied businesses together.