Two overseas subsidiaries of Strides Arcolab Ltd have inked a deal to acquire the generic pharma business along with branded pharma assets in Australia and Mauritius of South Africa-listed pharmaceutical company, Aspen Pharmacare Holdings, for close to Australian $380 million.
Strides shares surged 8.5 per cent or Rs 93.70 to end at Rs 1,187.90 on the BSE.
In its filings with the stock exchanges, Strides Arcolab Ltd said Strides Pharma Global Pte. Ltd, Singapore and Strides (Australia) Pharma Pty, Australia, its two wholly-owned subsidiaries, have signed definitive agreements with some wholly-owned subsidiaries of Aspen Pharmacare Holdings Ltd to acquire the latter's generic pharma business in Australia along with certain branded pharmaceutical assets. Aspen Pharmacare is listed on the Johannesburg Stock Exchange.
The deal also covers the sale by Aspen's Mauritius unit of a portfolio of six branded prescription drugs to Strides' Singapore business. Strides, a major manufacturer of soft gelatin capsules, said it will also gain access to Aspen's product pipeline that includes some "major product launches in the next six months".
The acquisition cost is estimated to be nearly A$380 million and it would be EPS accretive immediately, the company said.
SAL said the business and assets that were being bought from Aspen would catapult Strides and its subsidiaries to the top three generic pharma suppliers in Australia and among the top 10 pharma companies in that country.
The newly acquired business would operate under the Arrow Pharmaceuticals brand and would market nearly 140 generic prescription drugs and a wide range of non-prescription pharma products, giving SAL group 'one of the largest pharmaceutical product portfolios’ in that country.
This is SAL's second entry in the Australian generic pharma market. It had sold its Ascent Pharmahealth Ltd in Australia to Actavis in Jan 2012. The Arrow Pharmaceuticals business would be headed by Dennis Bastas, the previous founder and CEO of Ascent Pharmahealth Ltd.
Arun Kumar, founder and group CEO of SAL, commenting on the latest acquisition, said the Australian generic pharma market had been successful for his company and the acquisition of Aspen’s assets would help Strides 're-build its business in Australia’.
The consideration for acquisition would be approximately A$380 million and the products that are being acquired had a sales volume of nearly A$120 million in the last financial year (June 2014). The acquisition would be funded by a combination of international accruals and debt financing. The transaction is likely to close by the end of Q2 of FY16.