Parikh family sells stake in ZCL Chemicals to Advent in Rs 2,000 crore deal

Parikh Family, founder and promoters of ZCL Chemicals (ZCL) announced that they have sold the entire stake in the company to Advent International (Advent), one of the largest and most experienced global private equity investors, for an equity value of Rs 2,000 crores.

Pursuant to the signing of definitive agreements last month, the Parikh family sold its entire 80 per cent holding and has completely exited ZCL. Of the above, 26 per cent will be transferred subject to the customary closing conditions and receipt of all applicable regulatory approvals. Morgan Stanley Private Equity Asia (MSPEA), a private equity platform that acquired a 20 per cent stake in ZCL for Rs 150 crore in 2016, has also exited ZCL for Rs 390 crore.

Formerly known as Zandu Chemicals, ZCL is one of the fastest-growing pharma companies in the active pharma ingredients or API space in India.

In 2008, the Parikh family had acquired ZCL from Zandu Pharmaceuticals at an equity valuation of Rs 12.5 crore, resulting in a 160 times return in 12 years at the current valuations of Rs 2,000 crore.

“ZCL has emerged as India’s fastest-growing pharma company in the last 12 years. We are excited to achieve this strategic outcome for ZCL and its investors through this divestment. On behalf of the Parikh family, I would like to thank all the stakeholders, leadership team and employees, who have collectively created this world-class Indian company. We are confident that Advent’s resources will be a catalyst for ZCL’s next stage of growth and innovation,” said Nihar Parikh, Founder and Promoter of ZCL.

ZCL, which is a debt-free company as on date with surplus cash reserves, has posted a CAGR of 52.64 per cent in terms of its valuation for the last 12 years.

Headquartered in Mumbai, ZCL has a US FDA facility at Ankleshwar, Gujarat. It is a 100 per cent Export Oriented Unit, with over 90 per cent revenue from established markets like Europe and North America.