Indian company taps private finance for Japanese acquisition

New Delhi: Gujarat Themis is turning to private credit to help finance its acquisition of Japan’s MicroBiopharm Japan Co., with people familiar with the matter saying Orion Capital Asia has provided $58 million in funding.

The Indian pharmaceutical company announced a ¥21.5 billion valuation for the acquisition in May. A Gujarat Themis spokesperson did not immediately comment, while an Orion representative declined to comment.

Gujarat Themis said in a September 16 statement that it had raised ₹5.85 billion through a private placement of secured debt. The financing comprises five-year debentures carrying a 10% coupon and 18-month notes offering a 17.75% yield.

People familiar with the transaction said private-credit funds managed by Avendus Capital and Edelweiss Alternatives subscribed to the rupee-denominated securities. An Avendus spokesperson confirmed that its fund participated as a lead investor, while Edelweiss Alternatives did not immediately respond to a request for comment.

The company said the proceeds would be transferred to its wholly owned Japanese subsidiary to fund the acquisition, with any surplus available for general corporate purposes.

A growing role for private lenders

The transaction highlights the expanding role of private credit in funding cross-border acquisitions across Asia. Private lenders can offer companies quicker and more flexible financing than traditional banks, particularly when conventional credit markets are tighter.

Earlier this year, Indonesia’s PT Chandra Asri Pacific partnered with KKR’s insurance arm, Global Atlantic, to help finance its $1 billion acquisition of Exxon Mobil’s Esso-branded service stations in Singapore.

Gujarat Themis, established in 1981, says it was the first company in India to commercially manufacture the anti-tuberculosis drug rifampicin.

The growing use of private credit could give mid-sized companies more options for funding overseas acquisitions as banks become more selective. The trade-off, however, is often higher borrowing costs and shorter repayment periods.

For Gujarat Themis, the focus will now shift to managing the cost of its debt while integrating MicroBiopharm Japan. Successful transactions could encourage other regional companies to tap private lenders for larger cross-border acquisitions, even as traditional credit conditions remain tight.