The world's sixth largest consumer health and pharma giant Johnson & Johnson (J&J) has emerged as a front-runner to acquire electrolyte energy drink business of Jagdale Healthcare in a deal estimated at Rs 700 crore, people directly involved with the matter said.
Bangalore-based Jagdale has renewed a sale process to sell the business under the brand ORS-L with an estimated sales of Rs 100 crore annually. French giant Danone and Abbott Laboratories are among the other bidders who are participating in the process managed by investment bank MAPE Advisory.
The discussions with J&J were more advanced but deal-making was not definitive yet, the sources cited earlier added. Jagdale has sought nearly eight times valuation on annual sales, but J&J was unlikely to offer beyond seven times. ORS-L, a patented fruit-based electrolyte drink, competes in the broader energy drinks segment that includes players like Gatorade from PepsiCo.
Jagdale Healthcare MD Rajesh Jagdale declined to comment on speculation. Jagdale Healthcare is part of Jagdale Industries with diversified interests in pharma, agri and foods businesses. A J&J India spokesperson also declined to comment.
The J&J India unit has been revving up its M&A engine to accelerate growth in the consumer business, heavily driven by baby care products currently. The company has been chasing acquisitions in the over-the-counter (OTC) health space, while ramping up presence in feminine hygiene and skin care verticals.
Related Tags:pharma giant Johnson and Johnson, Bangalore-based Jagdale, French giant Danone