Image GlobaL pharma giant Pfizer has emerged as the frontrunner to acquire RFCL’s animal health unit, Vetnex, in a deal estimated around Rs 250 crore, people familiar with the situation said. This follows the ICICI Venture-controlled RFCL’s move to divest its animal health business earlier this year.

Pfizer is in advanced talks with RFCL — and possibly close to a deal — to acquire the unit, leaving other potential bidders out of the race. ET first reported on the RFCL (formerly Ranbaxy Fine Chemicals Ltd) decision to sell the unit in March this year.

When contacted, an ICICI Venture official refused to comment on individual portfolio companies or deals. A Pfizer spokesperson said the company does not comment on market speculation or rumours regarding acquisitions.

Pfizer has been exploring opportunities to bolster its animal health business, estimated below Rs 100 crore.

Sanofi Aventis and Virbac — the others who reportedly evinced an interest in the RFCL unit — have also been on the prowl to grow their veterinary healthcare operations in the country. Virbac had acquired GSK India’s animal healthcare division in 2006. RFCL’s animal health unit Vetnex is believed to have annualised turnover in the region of Rs 120 crore. Sectoral analysts said that veterinary business with indigenous molecules attracted 1.5-2x valuations in M&A discussions.

Vetnex, which has a presence in poultry, livestock and companion pet-healthcare verticals, acquired the Chennai-based Alved Pharma & Foods last year in a bid to scale up the business. Vetnex is believed to be the third-largest player in the Rs 1,400-crore domestic animal health market, which is growing annually at 10%. Scaling up business, both in terms of market penetration and size, remains a challenge for the segment.

MNC firms, including Vetoquinol, are in the fray to buy Wockhardt’s animal health business. On April 25, Wockhardt informed the stock exchanges that its board of directors approved the sale/transfer/disposal of the animal healthcare business.