HQ Team
March 30, 2023: Indian billionaire Azim Premji’s private equity and venture capitalist arm, Premji Invest, and Tube Investments, together will acquire Lotus Surgicals for INR 3.8 billion, according to a BSE filing.
Lotus will become a joint venture company of Tube Investments and Premji Invest with an equity shareholding of 67% and 33%, respectively. Premji’s investments are subject to the “completion of certain conditions precedent.”
Tube Investments will invest up to INR 2.3 billion, and Premji will invest up to INR 1.5 billion to acquire equity shares from the existing shareholders of Lotus.
Lotus is an Indore, India-based company engaged in the business of manufacturing and supply of medical and surgical consumables. The company reported a turnover of INR 1.2 billion in the fiscal year 2021-22, compared with INR 840 million the previous year.
The acquisition is the first step for the companies to initiate a Medtech Platform partnership. The platform aims to scale up through both organic growth and inorganic acquisitions, according to the filing.
Global Platform
The platform draws inspiration from the vision of “Atmanirbhar Bharat” and aspires to become a global platform to design, manufacture and distribute innovative world-class medical products at affordable price points.”
According to the Forbes and Bloomberg Billionaires Index, Premji’s net worth is estimated at $9.3 billion and $25 billion, respectively, as of February 2023.
In 2013, Mr Premji agreed to give away at least half of his wealth by signing the Giving Pledge.
Tube Investments is part of the billionaire Murugappa family’s Murugappa Group, an INR 547 billion conglomerate that was founded in 1900 as a money-lending firm in Myanmar.
The group has 29 businesses, including nine listed companies making abrasives, auto components, bicycles, fertilisers and sugar. The group’s marquee brands include BSA and Hercules bicycles and the Parry brand of sugar.
Fourth-generation entrepreneurs
Fourth-generation family member M.M. Murugappan has been the group chairman since 2018. The group has forged alliances with companies such as Groupe Chimique Tunisien, Foskor, Mitsui Sumitomo, Morgan Advanced Materials, Yanmar & Co. and Compagnie Des Phosphat De Gafsa (CPG).
The agreement to acquire Lotus was signed with India Medical Consumables Holdings Limited, a Samara Capital entity, and other shareholders.
The acquisition is expected to be completed on or before April 30 2023. Tube Investments is looking at new platforms for its growth as part of its long-term strategy.
It has identified medical consumables and devices, such as surgical sutures, as a new line of business with the potential to grow and expand in the future.
Med-tech business entry
“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,” said M.A.M Arunachalam, Executive Chairman of Tube Investments.
“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 medtech business,” he said.
T K Kurien, Chief Investment Officer, Premji Invest, said: “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.”
Premji Invest’s investments primarily support the philanthropic initiatives of the Azim Premji Foundation, a not-for-profit organisation. It invests in sectors including healthcare, technology and financial services.
