Tube Investments of India (TII), part of Rs 54,722-crore Murugappa Group and Premji Invest (through PI Opportunities Fund) on Saturday signed a share purchase agreement to acquire 100% equity capital of Lotus Surgicals from India Medical Consumables Holdings (a Samara Capital entity) and other shareholders.
This move by TII comes close on the heels of its announcement on the foray into pharma sector with plans to engage in contract manufacturing, research and development of active pharmaceutical ingredients (API). TII has identified contract development and manufacturing organisation (CDMO) and active pharmaceutical ingredients (API) as its new line of businesses.
Upon closing of the acquisition of shares, Lotus will become a joint venture company of TII and Premji Invest with an equity shareholding of 67% and 33%, respectively.
The acquisition is the first step for TII and PI to initiate a med-tech platform partnership which aims to scale up through both organic growth and inorganic acquisitions. The platform aspires to become a global platform to design, manufacture and distribute innovative world class medical products at affordable price points.
MAM Arunachalam, executive chairman of TII, said, “The acquisition of Lotus marks our entry into the med-tech business. We believe that the Indian medical industry is expected to be one of the fastest growing sectors driven by both demand and supply side factors. We are delighted to join hands with Premji Invest. Our deep expertise in establishing and managing large scale manufacturing, coupled with Premji Invest’s strong domain knowledge & investing experience will enable Lotus to tap the immense potential in the med- tech business.”
TII has been focussing to diversify its business by identifying new growth opportunities and has recently entered into clean mobility, electronics and alternate fuels.
TK Kurien, chief investment officer, Premji Invest said: “TII has an outstanding track record of incubating and scaling businesses across diverse sectors and creating stakeholder value through manufacturing and execution excellence. Premji Invest is pleased to deepen its partnership with TII through this med-tech platform. We believe the medical consumables market is attractive, and there is a unique opportunity to create a global platform that manufactures and distributes world class medical products by leveraging cutting edge technologies.”
TII manufactures fabricated metal products and specialises in cycles, steel tubes, strips, chains, and metal formed items.
It had reported a 15% increase in its net profit at `138 crore for the third quarter of FY23 as compared to Rs 120 crore in the corresponding quarter last fiscal. Total revenue was flat at `1,710 crore as compared to Rs 1,701 crore. The company has planned to expand its capacity at the large diameter precision steel tubes manufacturing facility at Tiruttani near Chennai at a cost of Rs 141 crore.