Synchron to dilute 15 per cent stake to fund expansion

Ahmedabad-based Synchron Research Services plans to dilute its 15 per cent stake to private equity institutions to raise funds for its future expansion plans.

Shivprakash, Managing Director of Synchron Research told Business Standard, "We are ready to dilute a further 15 per cent stake to raise funds for our future expansion."

Recently, Parexel, a leading international CRO picked up A 19.5 per cent stake in Synchron Research.

The company will use the funds for accelerating its inorganic growth through acquisitions in India and expand its operations to Hong Kong.

"By the end of 2007, we will acquire one more CRO firm based in Southern India," adds Shivprakash. Although he said that the south-based CRO will have a 75-bed capacity, he declined to give further details.

To start a joint venture (JV) in Hong Kong, Synchron is seeking a partner. The Hong Kong-based proposed venture will cater to the Chinese market's demand for cyclical research.

"Presently, we are talking to a HK-based university aiming for a clinical research facility in HK," adds Shivprakash. It plans to start its Hong Kong operations by the end of 2008.

Synchron Research enjoys complete support from its present partner Parexel for funding its expansion plans.

The company will need approximately Rs 10 crore to Rs 15 crore for its acquisition as well for its JV plan in Hong Kong for which it will dilute another 15 per cent stake to any other private equity player.

"We are unable to say at what consideration we will dilute the 15 per cent stake at present," he said. He added that the valuation of share prices will be done within the next 3-4 months.

Recently, Synchron Research acquired Innovance, a start-up contract research organisation based in Ahmedabad and simultaneously started its operations in Bangkok.