General Atlantic (GA) has become a significant shareholder in pharmaceutical product development company Rubicon Research by committing up to $100 million of primary capital and acquiring the stake held by Rubicon’s existing private equity shareholders. All other existing shareholders continue to maintain their shareholding in the company, according to a release issued on behalf of GA and Rubicon.
In October 2016, investment firm Everstone Capital had bought a 70% stake in the firm for a total outlay of Rs 220 crore, or $33 million. Back then, Everstone had invested $20 million directly into the business and had acquired stakes from Kotak Private Equity and a private investor. Everstone had recently indicated in a release that it will sell its entire stake in Rubicon Research to a global private equity player, generating 4.5x multiple and a 92% IRR in a span of two-and-a-half years.
As a result, a 4.5x return on an investment of Rs 220 crore would likely have fetched Everstone a sum of Rs 990 crore. FE could not independently verify the exact return. Founded by Pratibha Pilgaonkar, Rubicon is a specialty generics pharmaceutical product development company engaged in research, development and manufacturing of branded and specialty generic products, and over the counter (OTC) products.
With this investment from General Atlantic, Rubicon intends to focus on bringing to market innovative medicines to solve fundamental patient needs through the use of its proprietary drug delivery technologies, as well as increase its manufacturing footprint across the world. General Atlantic is also partnering with Rubicon to create an innovation platform through both strategic organic and inorganic growth initiatives.
Sandeep Naik, MD and head of India and Asia-Pacific at General Atlantic, and Shantanu Rastogi, MD of General Atlantic focusing on investments across core sectors of financial services, healthcare, consumer and technology in India and the Asia-Pacific region, will join the board of Rubicon. “We have been extremely impressed by the Rubicon team and the quality of the company’s R&D. Rubicon’s innovative technology platforms are a real differentiator and position the company to sustain its strong growth in the complex and specialty generics market,” Naik said.
General Atlantic and Rubicon will work together on a number of strategic initiatives including inorganic growth and geographic expansion of the company’s existing footprint. “We are excited to partner with Mrs Pilgaonkar and the entire Rubicon team to build Rubicon into an innovation-led leader in the global pharmaceutical market,” added Rastogi.