Ocimum Biosolutions has announced that International Finance Corporation (IFC), the private sector arm of the World Bank group, will invest USD 6.5 million of equity, for a minority stake, and debt in the company.
Funds raised from this transaction will be used for financing both organic as well as inorganic growth of the company.
Anuradha Acharya, Founder and CEO of Ocimum Biosolutions, said, "We are very happy to have IFC as our partner for growth. These are exciting times for Ocimum and to have IFC as an investor in the company brings a lot of confidence in our clients and partners."
Iyad Malas, IFC's Director for South Asia, said, "IFC's support to Ocimum will provide the company, its much needed growth capital to establish an internationally competitive contract research outsourcing company and promote the discovery of new drugs at lower costs. We will also help institute improved corporate governance standards, "company release stated.
This is Ocimum's first round of fund raising from private equity investors. The company is contemplating another round of fund raising in the next 18-24 months.
Recently, Ocimum acquired a Europe based oligo manufacturer. The company is also scouting for more targets in the European market.
Commenting on the transaction, Shiraz Bugwadia, A V P, Avendus Advisors, said "Ocimum is one of the few Indian players within the BioIT and micro arrays space to have scaled up successfully over the last couple of years. Ocimum has also been successful at using the inorganic route to scale rapidly by acquiring niche good quality companies in Europe such as MWG Biotech's division and now a Netherlands based oligos manufacturer."
Ocimum is a life sciences R&D enabling company with three main focus areas, BioIT, Microarrays and contract research services. The US operations of the company focuses on custom contract research services in the molecular biology area while the Indian operations provide BioIT services and leverage on India's low cost advantage in IT space.
The Ocimum has adopted an inorganic strategy to ramp up the business fast and has demonstrated its capability to execute this strategy in the past.