Private equity firm BanyanTree has stitched a deal to harvest its investment in a company it backed less than three years ago, stretching its exit spree just as it prepares to start raising its fourth fund.

The mid-market PE firm, which has exited at least three companies over the past six months and is looking to sell its stake in another, has now scored a full exit from Ivia Beaute Pvt Ltd, a personal care and beauty product manufacturer.

BanyanTree backed Ivia Beaute via its third fund in 2021. It is exiting the company after drugmaker Cipla Ltd agreed to acquire the cosmetics and personal care distribution and marketing business of Ivia Beaute.

Cipla Health Ltd, the consumer healthcare arm of Cipla, will acquire Ivia Beaute's Astaberry, Ikin and Bhimsaini brands, according to a regulatory filing. This business clocked revenue of Rs 55 crore in 2022-23.

The drugmaker will pay Rs 130 crore upfront to acquire the business and may pay up to Rs 110 crore more depending upon the achievement of certain financial milestones for the next three years.

Mumbai-listed Cipla said the acquisition is in line with its focus on enhancing its consumer healthcare and wellness portfolio. It didn’t give other details of the transaction. VCCircle has, however, gathered that Ivia Beaute will retain its business of manufacturing personal care products.

Ivia Beaute, founded in 2018, is headquartered in Haryana and offers private label products including skin cream, facial kits, face wash, hair care, services, skin bleach, moisturizers cream, skin scrub.

BanyanTree invested Rs 15 crore in Ivia Beaute, according to VCCEdge, the data research platform of VCCircle. The mode of its exit isn’t clear, since Cipla isn’t acquiring Ivia Beaute but only a portion of its business. It is, however, possible that Ivia Beaute could buy back the PE firm’s stake or announce a special dividend.

A person familiar with the transaction, said the PE firm will fully exit and that it is likely to generate an internal rate of return of around 25% on its investment. This could translate to a multiple of less than 2x return on the investment, according to VCCircle estimates.

Original Post: VCCircle