Aurobindo Pharma inks pact with New Mountain Capital to sell US-based unit Natrol for $550M

Aurobindo Pharma on Monday said it has inked a pact to divest Natrol — a wholly-owned unit of its US-based subsidiary — to private equity firm New Mountain Capital for $550 million (around Rs 4,048 crore).

Aurobindo Pharma had acquired Natrol in December 2014.

The drug firm has reached a definitive agreement to sell Natrol, a unit of Aurobindo Pharma USA, Inc., to an affiliate of New Mountain Capital to combine with Jarrow Formulas, Aurobindo Pharma said in a statement.

The all-cash transaction is valued at $550 million (or Rs 4,048 crore at the current exchange rate), it added.

Subject to customary closing conditions and regulatory approvals, the transaction is expected to close by January 2021, the Hyderabad-based firm added.

Natrol's annual sales for the 12 months ended March 31, 2020, stood at around $157 million.

Natrol has been a consistently profitable business, growing on all fronts under Aurobindo's ownership, the drug firm said.

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"Aurobindo is committed to evaluating and concluding strategic options towards focussed portfolio enhancement with the ultimate objective of enhancing stakeholder values. We are pleased to sell the Natrol business to an outstanding private equity player, who could focus additional resources to grow Natrol, its products and brands further," Aurobindo Pharma Managing Director N Govindarajan said.

He added that proceeds from Natrol's divestiture will be used to reduce debt and other new strategic initiatives.

Founded in 1980 as a cosmetics company, Natrol has evolved over the past several decades into a pioneer in nutraceuticals segment.

In another development, stock exchange BSE last Saturday signed an agreement with Inventivepreneur Chamber of Commerce and Industries (ICCI) to support small and medium enterprises (SMEs) and startups and promote their listing on the exchange.

Through this association, ICCI will offer assistance in evaluating SMEs and startups for listing on BSE SME board, it said in a statement.

(Disclaimer: Additional background information has been added to this PTI copy for context)