Vivimed Labs has entered into a definitive agreement for sale of some of its specialty chemical products to Clariant Chemicals India, a subsidiary of Switzerland based Clariant AG for R380 crore, in an all-cash deal.
The company manufactures active ingredients which are used in home and personal care segments like hair, skin, oral care and anti-microbial preservatives. It is also present in the industrial care segments like photo-chromic dyes and imaging chemicals. The company is a supplier to leading global brands such as Novartis, P&G, Gilead, GSK, J&J among others.The specialty chemicals division’s business of Vivimed, which is proposed to be divested, accounts for about 10% of the company’s revenue of about Rs 1,386 crore.
The definitive agreement is for the transfer and sale of identified products along with their associated trademarks and assents within the specialty chemicals division, the company said in a statement. “A major portion of the receipts from the deal will be used to reduce debts thereby saving substantial interest costs going forward. Further, it will provide increased financial flexibility to pursue profitable growth across businesses in regulated markets,” Santosh Varalwar, MD and CEO, Vivimed, said in the statement. “Currently, our debt levels are about R900 crore at the consolidated level. With the proposed selloff, we hope to retire some debt and expand our product portfolio in the regulated markets,” he told FE.
“The long-term plan is to achieve R5,000 crore revenues in the next three to five years,” he added.