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April 16, 2013

Deal Alert: Fulcrum Venture India invests INR 21.82 crores in ‘Shield Healthcare Pvt Ltd’

Fulcrum Venture India, a highly successful early stage venture capital investor started in 2000 by Krishna Ramanathan as a proprietary fund, today announced an investment of INR 21.82 crores in Shield Healthcare Pvt Ltd a pharmaceutical company within the branded formulations space. The company will use the proceeds to fund its business geographically and vertically integrate a manufacturing unit. As an integral part of this deal, Krishna Ramanathan, Founder-Partner, Fulcrum Venture India will join the Board of Directors of the Company. 

Commenting on the occasion, Krishna Ramanathan said, “Fulcrum Venture India is happy to partner with Shield Healthcare under the leadership of Mr L. Mahadevan and looks forward to the company scaling up over the next 5 to 7 years under his leadership. The company carries a strong product catalogue and with the growth of new products in the Gynaecologist and Consultant Physician segments. Fulcrum expects Shield revenue to increase significantly over the coming year, thereafter growing exponentially to INR 100Cr by 2016 yielding an EBIDTA in the range of 26% - 30% according to Pharma Industry standards. We also consider the valuation attractive given Fulcrum’s deep domain knowledge in the formulations business.” 

Shield with a top line of INR 24Cr, in FY 2012, moved into expansion mode recently to enlarge its southern and eastern presence into a pan Indian one. The company will close at a top line of INR 31Cr, in FY 2013. To realize its expansion plans Shield decided to launch a manufacturing unit, where in Fulcrum saw as a golden investment opportunity. It estimates the Factory and SBU will break even in the next 2 years, while the overall company is cash flow positive. Fulcrum believes that further investment into geographical expansion would turn positive cash-flow sooner. Shield, an ISO-9000:2008 certified organization, is aiming for UK MHRA accreditation by 2013 and expects US FDA approval by 2014. 

The main strength of Shield lies in its outstanding management team and focus on building very powerful brands, while phasing out other less promising ones. In keeping with our game changing investment policy Fulcrum has been active in developing strategies for expanding the sales division and future options of the factory. Shield is now focused on brands in the Gynaecology and Infertility segment; Fulcrum expects its revenue to rapidly increase in the next financial year due to the inherent value Shield has built into the product assets. 

Fulcrum has been focusing on early stage investing since its inception in 2000 and has a successful track record for offering financial support to promising start ups and SMEs in a variety of sectors such as Pharma, Niche Retail, Consumer Durables, Education, IT & Technology. Fulcrum Venture India continues to identify, fund and manage, promising investment opportunities and facilitate growth in the neglected SME sector. 

About Fulcrum Venture India 

Fulcrum has been focusing on early stage investing since its inception in 2000 and has a successful track record for offering financial support to promising start ups in a variety of sectors such as Pharma, Niche Retail, Consumer Durables, Education, IT & Technology. Fulcrum partners with promising SME’s to create good top line growth and high Return on equity. On average Fulcrum’s investments have, 8.95x cash invested since 2000. We focus on business fundamentals and partner ambitious management with big unique ideas in stable markets. For more information, please visit www.fulcrumventureindia.com 

About Shield Healthcare Pvt Ltd

Shield started operations in 1995 under the guidance and able leadership of Mr L. Mahadevan. Shield is currently present across 10 states with strong presence in Tamil Nadu and Andhra Pradesh. The company has robust plans to build a pan India presence in the next few years. Shield today is recognized as an integrated pharmaceutical company with core competencies in the development and manufacture of strong products in the Infertility segment, Active Pharmaceutical Ingredients (APIs), Finished Dosage Forms and drug discovery, as well as a robust pipeline for launching new products. For more information, please visit www.shieldhealthcare.co.in 

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