Zydus Cadila to divest two major units- Vivo, Gynova for Rs 1200 crore: Report

New Delhi: Envisioning to off-load the burden of debts, one of India's top drugmakers- Zydus Cadila aka Cadila Healthcare is likely to vend its anti-infective and gynaecology divisions for Rs 1200 crore, a recent report in The Economic Times has suggested. Gujarat-based Zydus is in talks with various financial investors apart from rival Sun Pharma and Cipla to clinch the deal, added the media report.

The two units are the second-largest contributors to the firm's consolidated revenues after the United States business. As per the annual report by Zydus for fiscal 2019, the overall revenue generated by the two units- anti-infectives and gynaecology was Rs 565 crore and Rs 282 crore respectively.

The anti-infective division known as Vivo sells under brands such as Monotax, Merovaz, Apilox, Cefoxim, Biotax and others while the gynaecology division, Gynova sells brands such as Provironum, ZYHCG, Ovucet, and Ccliya — drugs that treat infertility.

According to a media account in ET, Zydus has recently approached several strategic and private equity investors including Advent International, Blackstone, KKR and Carlyle to sell off the two units as part of a broader strategy to reduce debt in the company’s capital structure.

In the recent past, the company had acquired Heinz India's consumer wellness business funded by a mix of debt and equity. Medical Dialogues had reported that the Kraft Heinz Company had entered into a definitive agreement to sell Indian brands Complan, Glucon-D, Nycil and Sampriti to Zydus Cadila at a valuation of approximately INR 46 billion (approximately USD$625 million) on a debt-free and cash-free basis.

Also Read: Kraft Heinz to Sell Indian Brands Complan, Glucon-D, Nycil and Sampriti to Zydus Wellness Limited

The acquisition was completed by a mix of debt, equity and borrowed funds that consequently led to a financial burden on the firm. Cadila Healthcare shares are reported to have lost almost a quarter in the past one year, underperforming the benchmark index that rose about a sixth in the same period.

With the pressing financial stress, Zydus has recently entered into talks with financial investors to unload debt and strengthen its balance sheet via selling off two of its units for Rs 1200 crore. A formal process to find a buyer in this regard has been handed over to investment bank Jefferies, reported ET