tpg: TPG Capital looking to exit Sai Life Sciences with a $500 m cheque

Private equity investor TPG Capital is looking to exit its five-year-old investment in Hyderabad-based Sai Life Sciences, a pharmaceutical contract development and manufacturing organisation (CDMO), according to three people aware of the development, a move that could fetch the PE firm as much as $500 million for its minority stake in the company.

TPG, which had invested about $135 million (about ₹900 crore) in Sai Life Sciences in 2018, holds 43.4% stake in the company. Established in 1999, the company entered the contract manufacturing services business in 2005.

“TPG and the company have been engaged in discussions with investment banks for a mandate for the sale of TPG’s stake in the company. Investment bank Jefferies has been shortlisted for the mandate,” said one of the people cited earlier.

“The stake sale is likely to value the company north of $1 billion, and will fetch TPG handsome returns on its investment. The sale process will be launched in the next few months.”

The same person said that the promoters of the company do not intend to sell their stake at this point.

TPG declined to comment. Emails and text messages sent to Sai Life Sciences’ managing director Krishna kanumuri, and the company’s chief financial officer, Siva Chittor, remained unanswered till as of press time.

TPG’s likely stake sale is seen attracting global PE funds which have already struck several deals in India’s pharma and healthcare sector.

“In the current challenging global macro environment, pharma and healthcare is one area which continues to see strong private equity interest,” said one of the people cited earlier.