BSE-listed Vivimed Labs, a specialty chemical company, is close to acquiring a European company in a deal estimated at $50 million (Rs 225 crore).
Mr Santosh Varalwar, Managing Director, Vivimed Labs, said, “We have identified the target company, but cannot reveal the name as the process of completing the formalities is still on. Most probably the deal would be formalised before end of next month.”
According to market sources, the targeted Spain-based specialty chemical company commands a topline of $100 million. Vivimed plans to fund the deal through private placement worth $20 million, internal accruals and debt.
The company's APIs (active pharmaceuticals ingredients) products include Triclosan (an anti-bacterial drug used in toothpaste and soap etc), chlorophenesin (an anti-fungal preservative used in cosmetics, fibres and foodstuffs), AVIS (a sunscreen chemical used in body creams and lotions), NDGA (a new anti-oxidant developed by the company, which finds use in cosmetics and food and beverage industry) and CaGP (used in oral care formulations for protecting dental enamel).
Investments, capacity additions
The company has drawn plans to invest Rs 58 crore in the upcoming plant in Visakhapatnam and existing plant for sunscreens at Bidar in Karnataka. The capacity of two plants in Hyderabad is also being augmented.
“The total investment in Visakhapatnam plant (for bulk chemicals) in the first phase will be Rs 75 crore. The plant is slated to be operational by next December. The capacity addition in Bidar plant will take care of expanding the portfolio of sunscreen products,” said Mr Varalwar. Vivimed has set a revenue target of Rs 900 crore by FY13 end.
“This year, we will achieve revenue of about Rs 450 crore with profit margin at about 10 per cent. We are confident of doubling this in the next two years with organic and inorganic expansion and new product launch,” Mr Varalwar said.
The company's shares rose 3 per cent on BSE to Rs 298 on Tuesday.