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ICICI Venture-controlled RFCL has succeeded in its bid to acquire US-based speciality chemicals major Mallinckrodt Baker in a deal estimated at $340 million, sources close to the development said. Once the transaction is concluded, RFCL will be acquiring a company that is over three times its size.

ICICI Venture is likely to fund the equity portion of the deal while the debt will be provided by ICICI Bank. A couple of other foreign banks could also join the Indian bank in funding the deal. A formal announcement will be made shortly, and the deal will be completed over the next two months. Mallinckrodt Baker is part of $10-billion healthcare giant Covidien (formerly Tyco Healthcare). Sources said the deal structure has not been finalised yet. ICICI Venture could put in close to $100 million as equity contribution to the deal.

The debt is likely to be priced at around 400 basis points above Libor. The sixmonth Libor is now around 3.17%. However, the final pricing of the debt portion has not yet been frozen, and could change according to market conditions. Higher the equity, lower the interest on debt.

ICICI Venture MD Renuka Ramnath was not available for comment as she was travelling. The transaction could make the Indian company a critical player in the consolidating global fine chemicals industry, especially in the laboratory product space. RFCL has three divisions—animal healthcare, fine chemicals and diagnostics.

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