MANKIND PHARMA TAPS BARCLAYS AND DEUTSCHE BANK FOR RS 13,630 CR ACQUISITION OF BHARAT SERUMS & VACCINES

Mankind Pharma has selected Barclays Plc and Deutsche Bank AG to help arrange financing for its proposed Rs 13,630 crore acquisition of Bharat Serums & Vaccines, according to Bloomberg sources.

"The lenders will provide loans for the acquisition and help with organizing a rupee-denominated bond sale. Mankind may also consider a potential share sale and use some of its own cash to fund the acquisition. Deliberations are ongoing and no final decisions have been made," said the Bloomberg report quoting sources.

ET earlier today reported that the company will generate Rs 4,000 crore from internal accruals and the balance would be funded majorly through debt.

In May, Mankind's board approved an equity fundraising of Rs 7,500 crore, and also increased the borrowing limit to ₹12,500 crore. Mankind had a net cash balance of Rs 3,260 crore and negligible debt as on March 31.

Mankind, India's fourth largest pharmaceutical company by market share, said on Thursday that it entered into a definitive agreement to acquire BSV from PE firm Advent International.

The acquisition will be made at 22-23 times BSV's expected FY25 Ebitda.

Mankind Pharma’s CFO Ashutosh Dhawan said, servicing debt wouldn't be a problem as both Mankind and BSV have strong fund generation abilities, with cash flow to Ebitda at around 70%.

Mankind said the acquisition will be earnings-per-share accretive from the second year.

The Mankind management said they expect sustained double-digit revenue and 1-2 percentage point Ebitda margin growth yearly after the BSV acquisition, driven by synergy benefits, cost optimisation and product launches.

BSV had revenue of Rs 1,723 crore in FY24, with year-on-year growth of 20% and an Ebitda margin of 28%. It has posted a 21% compounded annual growth rate over the last three years.