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Exclusive: Goldman Sachs-backed BPL Medical scouts for more overseas M&As

BPL Medical Technologies Pvt. Ltd is looking to buy more overseas assets to enter new technology verticals, as the Goldman Sachs-backed healthcare devices maker steps up its expansion plans after buying a UK-based company last year.

The company is screening potential targets in the US and Europe in segments such as hospital consumables, radiology and imaging, CEO and managing director Sunil Khurana told VCCircle.

BPL Medical, which acquired the UK's Penlon Ltd for an undisclosed amount in September last year, may zero in on a target within six months and may look to close a maximum of two acquisitions in next 12 months, he said. 

Khurana declined to name the potential targets or the size of any deal BPL Medical might ink but said the company might seek to raise $50 million (Rs 335 crore) to fund an acquisition.

BPL Medical is part of the consumer electronics maker BPL group, controlled by the Nambiar family. Goldman Sachs Private Equity, which invested Rs 110 crore in BPL Medical in 2013, owns about 60% of the Bangalore-based medical devices maker.

Goldman Sachs, which declined to comment for this article, has also invested in other healthcare companies such as Nova IVI Fertility and Max India.  

Lagging behind global peers
BPL Medical operates in an Indian market that research and consulting firm Global Data estimates will cross $17 billion in size by 2020 from $10.4 billion in 2014. Indian companies, however, make up a small part of the local and global medical devices market, which is dominated by multinational companies Siemens, GE Healthcare and Phillips.

One of the reasons why Indian companies lag behind global peers is lack of availability of technology at home. BPL Medical is among of handful of Indian companies looking to make acquisitions in niche technology areas that would not only give it a foothold in some overseas markets but also possibly an opportunity to bring manufacturing to India for cost arbitrage.

Another medical devices maker that seeks to expand via acquisitions is Trivitron Healthcare Pvt. Ltd. Earlier this week, Fidelity Growth Partners-backed Trivitron acquired Turkish invitro devices maker Bome Sanayi Urunleri Dis Tic Ltd Sti for about $5.5 million. In 2012, it acquired Finnish firm Ani Labsystems for $22 million and started manufacturing some of Ani's products at its Chennai facility. 

Chief executive Khurana said the company, which makes products such as electro cardiographs, defibrillators and ultrasound scanners, is not keen to make any acquisitions in India as it feels there is greater technological advantage in acquiring overseas firms.

Penlon investment, revenue target
The Penlon deal helped BPL Medical acquire anesthesia and vaporizer products in the critical care segment.

Khurana said the company has earmarked around £10 million (about Rs 90 crore) to ramp up research and development activities at Penlon over the next two or three years with an aim to introduce new products.  

A product from the Penlon stable, desflurane vapourizer, is undergoing clinical trials in the US and is likely to get approval from the US Food and Drug Administration for a launch later this year, Khurana said.

The company is also considering setting up an office in China to distribute its products, he said. Besides, it is looking to set up its third factory to add to its two plants in Kerala.

The initiatives are aimed at expanding the company's revenue. The company posted revenue of Rs 261 crore in the year through March 2015, with Rs 110 crore coming in from Penlon. It has set a target of Rs 370 crore for 2016-17, Khurana said.

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(BPL Healthcare)

BPL Medical Technologies Pvt. Ltd. is engaged in manufacturing of medical equipment. Its products include electrocardiographs, patient monitors, defibrillators, central nursing stations, stress test systems, oxygenerators, ultrasound scanners, colposcopes, foetal monitors, foetal dopplers and X-Rays. The company was founded in 1967 and is based in Bengaluru, Karnataka. It operates as a subsidiary of BPL Ltd.

Head office:
Bengaluru
Year Founded:
1967
Management:
Ajit Nambiar

Penlon Ltd. is engaged in manufacturing anaesthesia systems and vapourizers. It also offers patient monitors, laryngoscopes, suction control products, including medical gas regulators, injector suction products, receiver jars, electric and portable suction products and carts, oxygen therapy products such as regulators, flow meters, and humidifiers and medical rail systems for wall mounting and mobile trolley applications. The company was founded in 1943 and is based in England, United Kingdom. Penlon Ltd. operates as a subsidiary of BPL Medical Technologies Pvt. Ltd.

Head office:
Barton Lane
Year Founded:
1943
Website:
Management:
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