Trivitron Healthcare to raise Rs.150 crore from India Value Fund

29 nov 2013 fri

Medical devices maker Trivitron diluting mid teen stake in this round; deal expected to be signed in 10 days 

 

According to estimates of the Association of Indian Medical Device Industry, while the global medical devices market is valued around $315 billion, the sector in India is worth a mere $4 billion. Photo: Priyanka Parashar/Mint

Mumbai: Medical devices maker Trivitron Healthcare Pvt. Ltd is raising nearly Rs.150 crore from private equity (PE) firm India Value Fund Advisors in lieu of a minority stake, said two people familiar with the development, one of them directly involved in the deal.

The deal is expected to be signed in 10 days, they said, both declining to be identified. One of the persons said that Trivitron is diluting “mid teen” stake in this round.

In October last year, Fidelity Growth Partners India invested Rs.400 crore for a 20-23% stake in Chennai-based Trivitron, acquiring the shares from PE investors ePlanet Ventures and Headland Capital, Mint had reported.

“The company is growing fast and is in an expansion mode. They are getting into new geographies and are also considering acquisitions for building presence in the imaging and lab diagnostics subsets,” said one of the two people cited above.

Last November, Trivitron acquired Finnish diagnostics technology firm Ani Labsystems for €15.8 million. It gave Trivitron the capability to enter the point-of-care, immuno and molecular diagnostics segments.

Chennai-based investment bank Veda Corporate Advisors Pvt. Ltd is running the mandate for the latest transaction.

Trivitron founder and managing director G.S.K. Velu and India Value Fund’s managing partner Vishal Nevatia did not respond to mails sent to them.

Trivitron, founded in 1997, is the largest wholesale distributor and after-sales support provider of medical equipment and devices in India. It has joint ventures with Japan’s Hitachi-Aloka Medical Ltd and Spain’s Biosystems SA for manufacturing ultrasound equipment and laboratory diagnostics reagents, respectively.

India’s medical equipment sector is still emerging and dominated by imports. According to estimates of the Association of Indian Medical Device Industry, while the global medical devices market is valued around $315 billion, the sector in India is worth a mere $4 billion. The Chinese medical devices market is nearly $8 billion, and the US market, the world’s largest, is worth over $110 billion.

Healthcare is one of the most active sectors this year in terms of both PE and merger and acquisition (M&A) deals. Between 1 January and 21 November, there were 59 PE deals worth $758.6 million, according to estimates by VCCEdge, which tracks investment activity in the country. There were 54 M&A deals in the healthcare segment worth about $2.77 billion, compared with 56 deals worth $1.53 billion in the same period a year earlier.

In September, PE firm TPG Growth acquired a minority stake in Bangalore-based surgical equipment maker Sutures India Pvt. Ltd for Rs.150 crore. In May, Goldman Sachs invested Rs.110 crore in BPL Medical Technologies for an undisclosed equity stake. And earlier in January, Norwest Venture Partners, a global investment firm, invested $11 million in Perfint Healthcare Pvt. Ltd, a medical technology company.

“Indian medical devices market has been growing rapidly, still there are only a handful of players which have managed to achieve scale with differentiation,” said Sunil Parnami, director at financial consultancy firm Lodha and Co., who also heads the company’s healthcare practice. “In the electronic segment, emergence of players like Perfint, Allengers, BPL Medical Technologies, etc., is a good sign for the industry, which historically has been dominated by the likes of GE, Medtronic and Philips.”

 

ABHISHEK KUMAR

PGDM 1ST YR