Drugmaker Aurobindo Pharma has reached a definitive agreement to sell Natrol LLC., a wholly owned subsidiary of Aurobindo Pharma USA Inc., to private equity firm New Mountain Capital and its affiliate Jarrow Formulas.
The all-cash transaction is valued at $550 million (₹4,048 crore at the current exchange rate), Aurobindo Pharma intimated the stock exchange on Monday morning. As is the case with such transactions, this too will be subject to customary closing conditions and regulatory approvals. It is expected to close by January 2021.
Aurobindo Pharma had acquired the assets of Natrol in December 2014. “Natrol has been a consistently profitable business, growing on all fronts under Aurobindo’s ownership. Natrol’s annual sales for the 12 months ended March 31, 2020 was about $ 157 million,” the company said. The net worth of Natrol as on March 31 was $82.41 million.
“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,” Managing Director N. Govindarajan said. He thanked all stakeholders, including employees, who “supported in acquiring and bringing Natrol to a growth path in the past six years.”
The proceeds from Natrol’s divestiture will be used to reduce debt and for other new strategic initiatives. Aurobindo is committed to evaluating and concluding strategic options towards focused portfolio enhancement with the ultimate objective of enhancing stakeholder values, he said.
Jefferies served as the sole financial advisor to Aurobindo and Sullivan & Cromwell LLP acted as legal counsel to Aurobindo.