Piramal sells its DRG business to Clarivate for $950 million
17 January 2020
Piramal Enterprises Limited (PEL), the flagship of the Ajay Piramal group, today announced the sale of PEL DRG Dutch HoldCo BV, a 100 per cent subsidiary of PEL and the holding company for Decision Resources Group (DRG), to Clarivate Analytics plc in a deal worth $950 million.
DRG is engaged in healthcare insights and analytics business and is a global leader in providing trusted insights and analytics, PEL stated in a release.
The sale consideration of $950 million includes $900 million on closing and $50 million to be received at the end of 12 months from the date of closing, PEL said, adding that the transaction is subject to shareholder approval and is expected to be completed by end February 2020.
PEL had initially invested $650 million in 2012 to acquire DRG, which included $260 million infused as equity. Under the transaction, PEL has realised 2.3 times its initial equity investment in rupee terms, PEL stated in a release.
“We are pleased to have grown DRG’s market leadership over the last few years and believe that through this combination, Clarivate, with its size and scale, is well positioned to further accelerate DRG’s growth potential. This transaction demonstrates our continued commitment to create sustained long term value for all stakeholders,” Ajay Piramal, chairman, Piramal Group, stated.
Besides raising the equity capital in PEL, this transaction further strengthens the company’s balance sheet and also marks another step towards significantly unlocking value in future, he added.
“This is a milestone acquisition which doubles the size of our Life Sciences business, is accretive to our 2020 earnings and sets us up as an essential, end-to-end, industry-leading data and analytics provider in the highly attractive Life Sciences ecosystem. Both companies have a great heritage - built on talented people with deep industry subject matter and technical expertise. Together, we look forward to unlocking the tremendous potential of a unified team,” said Jerre Stead, executive chairman and CEO of Clarivate Analytics.
DRG, the high-value data, analytics and insights business of the Piramal Group, specialises in enabling pharma, biotech and medical technology companies to achieve commercial success in complex health markets with the creation of effective patient-centric commercial strategies.
With this acquisition, the over $5 billion Clarivate will be well positioned in the $19 billion Life Sciences analytics market, which is enjoying double-digit growth.
DRG, however, reported a net loss of Rs218 crore. It has been struggling to catch up with the group performance, prompting PEL to consider divesting stake in the subsidiary.