ICICI Venture has acquired the allied business operations of domestic pharma major, Ranbaxy Laboratories, in a deal that involves management buyout. The acquisiton is valued at Rs 125 crore.

ICICI Venture and Ranbaxy concluded the deal recently and Ranbaxy is likely to make an announcement by the end of this week. ET was the first to report in February that Ranbaxy was negotiating with various parties for a management buyout of its allied business operations. At that point, ICICI Venture was the frontrunner among the potential buyers. When contacted, a Ranbaxy spokesperson said, "We do not comment on speculation."Mape Advisory Group, a boutique investment bank with significant focus on pharma, has advised the company on its deal with ICICI Venture.

The allied business includes the animal healthcare business, the fine chemicals business and the diagnostics business. The three businesses, though profitable, have been degrowing over the last few quarters prompting a decision by the company management to divest these businesses. Total sales for the allied business operations is around Rs 150 crore.

Ranbaxy is also likely to sell part of the diagnostics business separately to Dade Behring. The US-based diagnostics major has an alliance with Ranbaxy for the diagnostics business. Ranbaxy Diagnostics started its operations in 1987 and provides services to clinical laboratories and blood banks. The company's shares registered the largest gain in a week on Thursday, closing at Rs 544.25 on the Bombay Stock Exchange, up 3% from the previous close.The Delhi-based Ranbaxy, which is now concentrating on its core business -pharmaceuticals, has been working on selling its allied businesses for some time now, as it started restructuring its operations. The company initially tried to hive off the three businesses of fine chemicals chemicals, animal healthcare and diagnostics on a stand-alone basis. Following unsuccessful attempts to do so, the company consolidated the three businesses.

The process chemicals and speciality chemicals businesses constitute the fine chemicals division. The division is engaged in the production of re-agents used in manufacturing processes for specialised industries and laboratory chemicals for R&D. The division has exclusive marketing rights in India for over 17,500 rare chemicals. The Animal Health business has three business units for poultry, a portfolio of more than 100 products for poultry, livestock and companion animals, including pharmaceuticals for therapy, feed additives for animal feed and vaccines for disease