Abu Dhabi’s Mubadala Investment Company and US-based private equity firm Warburg Pincus have joined hands to acquire Mumbai-based Encube Ethicals. The duo has emerged as frontrunners to acquire up to 74% of Encube Ethicals, valuing the pharma company at INR 165 bn (USD 1.8 bn), The Economic Times reports. Sweden’s buyout firm EQT is the only other serious contender ahead of binding bids next week.

Why it matters: Encube’s valuation is being driven by the US BioSecure Act, which is forcing American pharma companies to decouple from Chinese manufacturers. As US regulators tighten the screws, specialized Indian players with US approved manufacturers like Encube will gain a strategic advantage over their rivals.

The details: Singapore’s private equity firm Quadria Capital, which holds a 14.9% stake, is expected to offload all of its stake. Promoters Mehul Shah and his family, who own about 84.2% of the firm, will also sell a significant portion of their holding.

Who are they? Encube, founded in 1998, is a topical-focused pharma contract manufacturer developing brands such as Soframycin. It operates three manufacturing plants in India and holds approvals from 12 global regulators, including the US Food and Drug Administration. About half its revenue comes from contract manufacturing, with the rest from the India and US markets.

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