Zydus acquires Tokyo-based Nippon Universal

Cadila Healthcare today announced the acquisition of 100% stake in Tokyo-based Nippon Universal Pharmaceutical.

According to a release issued by Zydus to the BSE today, Nippon reaches out to more than 4,000 hospitals and clinics, and is expected to provide a fillip to the group’s operations in a market that is highly complex and dominated by local pharma Companies.

Pankaj R Patel, chairman and managing director, Zydus, said: “We had announced our intentions of being a long-term player in this market when we set up our subsidiary last year. Going forward, I believe this acquisition will unlock value for us as the generic market in Japan is just opening up, and post-2010 we expect this market to be a major growth driver for our global business.”

Read the article in Business Standard.

US-based PE firm Jacob Ballas invests $10 mn in biotech firm Avesthagen

US-based private equity firm Jacob Ballas Capital is close to buying a minority stake in Bangalore-based biotech firm Avestha Gengraine Technologies, popularly known as Avesthagen, for about $10 mn. Jacob Ballas’ $10 mn investment will be $5 mn in equity and $5 mn in warrants. The deal is being structured at Rs. 1850 per share, and values the company at $124 mn.

Jacob Ballas is an India-focused private equity firm floated by New York Life Investment Management, a wholly-owned subsidiary of New York Life Insurance Company, Singapore-based Excelfin, Indo-Pacific Estates and India’s construction-engineering firm Punj Lloyd.

Avesthagen had recently raised $32 mn from Fidelity Investments and France-based biotech majors BioMerieux and Limagrain and the food giant Danone. The company has also raised $5-7 mn from Indian corporates such as the Godrej, Cipla, the Tata Group, and ICICI Ventures. ICICI Ventures and Fidelity hold 19% and 10% stake, respectively, in the company while other strategic investors hold 4-6% stake.

Avesthagen is into biopharmaceuticals, bio-nutritionals and bio-agriculture, and also has a portfolio of heath foods, including biscuits and breakfast cereals. Jacob Ballas’ fund infusion will be used for the company’s proposed acquisitions and patent filings. Avesthagen is in the process of acquiring two domestic seed companies to deploy technology that it has developed in the agri-biotechnology business and is in talks with at least five Indian seed companies for possible acquisitions. The capital expansion is also being done to set up manufacturing facilities to upscale production, before moving into phase two of research and development.

Read The Economic Times article.
Related Post:
Avesthagen sells 20% stake for €25 mn

Standard Chartered may buy stake in sick pharmaco Morepen

A Standard Chartered Bank investment arm may acquire stake in the ailing pharma company Morepen Labs, after New York-based and Asia-focused private equity fund Avenue Asia walked out of the deal last week. As per the latest debt restructuring plan, Standard Chartered and the key promoter of Morepen, Sushil Suri, will infuse Rs. 100 crores each in a bid to revive the company. Avenue Asia had earlier committed to invest Rs. 150 crores in the company, before they walked out of the deal.

The company has informed the stock exchanges that it would issue 24.4 mn equity shares and 53.6 mn warrants. These warrants will be issued to the new investor and the promoter; both will have the rights to subscribe to the equity of the company. However, the company has not officially announced the new investor. The warrants will be issued at Rs. 20 per share.

Read The Economic Times article.

Global Hospitals buys Chennai-based Sankara Hospital for Rs. 257 crores

Hyderabad-based Global Hospitals, part of Ravindranath GE Medical Associates, has acquired Sri Kanchi Kamakoti Sankara Hospital (formerly Tamilnad Hospital) in an all-cash deal, for Rs. 257 crores. The amount would be paid in tranches. The Chennai-based Sankara Hospital is spread over 46 acres and has 450 beds.

In July 2006, a division bench of the Madras High Court had permitted the Sri Kanchi Kamakoti Peetam Charitable Trust to sell the Sankara Hospital. The trust, in its application to sell the hospital, said it could not run it and had become heavily indebted. Subsequently, corporates and healthcare majors, including the Murugappa Group, Satya Sai Hospitals of Chennai, Bangalore-based Shriram Properties, Kolkata-based Advanced Medical and Research Institute and Global Hospitals bid for the property. Global emerged winner by quoting Rs. 257 crores and assured that it would run the existing hospital, retain the employees and provide 50 free beds.

Global Hospitals plans to transform the Sankara Hospital into a ‘Health City’ by incorporating facilities like liver, kidney and a multi-organ transplant institute, a heart and lung institute, neurosciences, trauma, orthopedic and cancer institutes and providing alternative therapy in the next 5-10 years at an investment of around Rs. 750 crores. The acquirer also plans to construct service apartments, and subsequently, also increase the number of beds to 1000.

Read more in the Business Standard article.

Ahmedabad-based CRO Synchron acquires local firm Innovance

DNA Money reports that Ahmedabad-based contract research organization (CRO) Synchron Research Services Private Limited has taken over Innovance, a local start-up CRO. The financial details of the transaction, which was facilitated by Deloitte, have not been disclosed. The acquisition is touted as a first-of-its-kind in the Indian CRO space.

Innovance has been co-promoted by Dr. BB Lohray, the former head of research at Zydus Cadila who was in the headlines recently for being fired by the company for alleged embezzlement of funds. The promoters of Innovance wanted to sell off the firm and had approached Synchron 4-5 months ago.

The deal will help Synchron hike its bed capacity to nearly 200 from the 90 and catapult it to the league of Asia’s largest CROs. However, the company is not planning a halt in its inorganic growth strategy anytime soon. It is looking for more acquisitions in India and even in other parts of Asia to increase its Asian footprint, as per company officials.

Glenmark acquires 90% stake in Czech firm Medicamenta

The Economic Times reports that domestic pharma company Glenmark Pharmaceuticals has acquired a majority stake in Czech firm Medicamenta through its wholly-owned Swiss subsidiary, Glenmark Holdings SA. As per the Czech Law, a holding of more than 90% shares in a company would trigger a mandatory takeover bid for the remaining shares. Glenmark will acquire more than 90% in Medicamenta. The financial details of the deal have not been disclosed.

Mumbai-headquartered Glenmark employs 400 scientists and 4000 staff. It sells its products in over 80 countries worldwide and had recorded revenues of $250 mn in the last fiscal year. Medicamenta’s projected revenues for 2007 are about $8 mn. The Czech firm has 60 employees and manufactures 29 solid and semi-solid formulations.

Torrent in association with Fortress Investment Group and Greater Pacific Capital for Merck bid

The partners of Torrent Pharmaceuticals, in its bid to acquire Merck’s generics business unit, have come to light. New York-based private equity and hedge fund manager Fortress Investment Group and London-based private equity player Greater Pacific Capital, in association with Torrent Pharma, are close to bagging the over $2 bn-worth global generics business of Merck. This consortium and Israeli pharma company Teva may be the only two left in the fray with the other two global pharma majors Mylan and Actavis having dropped out of the race.

Fortress Investment Group has $30 bn in assets under management. This New York-headquartered group is largely into the businesses of private equity and hedge funds management. The private equity business of Fortress Investment Group manages approximately $17.5 bn of assets under management.

The other private equity firm, Greater Pacific Capital based at London, is a much smaller player with under $1 bn assets under management currently. Greater Pacific’s CEO and founder partner is Ketan Patel who was previously a managing director in the investment banking division at Goldman Sachs, where he founded the Goldman Sachs Strategic Group, a think tank at Goldman Sachs. Greater Pacific Capital invests primarily in equity or equity-related securities in public and private companies in India and China.

If this deal were to come through, it would be one of the biggest by an Indian company in the pharmaceutical sector. Torrent Pharma will have a minority stake while a big chunk of the funding will be done by Fortress Capital. If this consortium wins the bid then Torrent Pharma will manage the entire generics business, while the private equity players will be financial investors.

Read The Economic Times article.

Trinity Capital makes another pre-IPO investment in Fortis Healthcare for Rs. 87 crores

UK-based private equity fund Trinity Capital has increased its stake in Ranbaxy group-promoted Fortis Healthcare Limited to 4% from 1%, through an additional investment of Rs. 87 crores in 6 mn equity shares of Fortis Healthcare. Earlier, in January 2007, Trinity had made an initial investment of Rs. 28 crores for 2 mn equity shares of Fortis Healthcare. The private placements have been in the run up to the initial public offer, to be announced by Fortis Healthcare, during the first quarter of the financial year 2007-08.

Fortis Healthcare currently has a network of 11 hospitals, primarily in North India, and 16 satellite and heart command centers (including one heart command center in Afghanistan). The hospitals include multi specialty hospitals as well as super-specialty centers, providing tertiary and quaternary healthcare to patients in areas such as cardiac care, orthopedics, neurosciences, oncology, renal care, gastroenterology and mother and child care.

The book running lead managers to the issue are JM Morgan Stanley, Citigroup Global Markets and Kotak Mahindra Capital.

Read the article in Business Standard.

Torrent Pharma bids $5-6 bn for Merck’s generics business; Ranbaxy pulls out

Two surprising developments have taken place with the Merck deal. Ahmedabad-based Torrent Pharmaceuticals has reportedly emerged as one of the aggressive bidders for German pharma major Merck’s generics business. Torrent has valued Merck Generics at a whopping $5-6 bn. Torrent has made the bid with the help of private equity funds. With this, Torrent joins the league of global pharma giants like Teva, Mylan Laboratories, Novartis and Actavis who are in vying for Merck’s generics business. At the home turf, it is pitted against pharma companies Cipla and Ranbaxy.

Also, it has been learnt that Ranbaxy is pulling out of Merck bid on account of concerns of over-valuation. Ranbaxy was being advised by Goldman Sachs and Citigroup on the deal.

Opto Circuits to buy European medical equipment firm for around €16 mn

Bangalore-based Opto Circuits India Limited is planning to acquire a medical devices company in Western Europe. The name of the company has not been disclosed. The deal, estimated to be around €16 mn, is likely to be an all-cash deal and would most likely be concluded early in the next financial year.

The European company manufactures a wide range of balloon catheters assemblies and related products for coronary and other applications. Opto Circuits has a presence in the non-invasive medical devices segment.

In January 2006, Opto Circuits acquired Germany’s EuroCor GmbH for Rs. 60 crores. EuroCor designs and manufactures stents.

Read more in the DNA Money article.

Zydus Cadila acquires Liva Healthcare

Ahmedabad-based pharma company Zydus Cadila has acquired a 97.5% stake in Liva Healthcare in an all-cash deal. The acquisition will be funded through cash accruals and debt.

Zydus expects the acquisition of Liva Healthcare will help the former to establish its presence in the Rs. 1500 crores derma segment, seventh largest therapeutic segment in the Indian pharma market. The market for dermatology products has grown at a CAGR of 14.1% over the last three years.

Zydus’ domestic formulations business contributes to over 50% of the group’s turnover with as many as 17 brands amongst the top 300 pharma brands in India. In the participated segments, the group is a leader in the cardiovascular, gastro-intestinal, women’s healthcare segments and has a strong presence in the respiratory, pain management and anti-infective segments.

Liva Healthcare is growing at more than 15%. It is a profit making company and it is likely to post sales in excess of Rs. 37 crores in 2006-07. Zydus Cadila has a turnover of Rs. 1800 crores. In the past, the group acquired Recon Healthcare, German Remedies, Banyan Chemicals and Alpharma France.

Read the article in Business Standard.

Sun Pharma to hive off R&D work into new company SPARC

Sun Pharmaceuticals will spin off its research and development (R&D) activities into a new company called Sun Pharma Advanced Research Company (SPARC). The transfer will include the company’s New Chemical Entity (NCE) and New Drug Delivery System (NDDS) programmes, which have an estimated 100 scientists.

Sun Pharma will infuse $45 mn into the new company, to enable it to sustain its operations until revenues from out-licensing deal start flowing in. The company could be looking at raising funds for its new company through equity or debt. It is planning to invest $60 to $65 mn in the new research company in the next three years. Research for generic drugs will remain with the main company.

The de-merger will offer investors an option to separately hold investments in businesses with different return characteristics, depending on their risk and return expectations. The new research company, SPARC, is being valued at more than $450 mn. Simultaneously, the de-merger of Sun Pharma’s innovative R&D business could significantly de-risk the company’s core business.

Read the article in The Economic Times.

PE firms may not support Ranbaxy’s bid for Merck’s generics business

In a major setback to Ranbaxy Laboratories’ bid attempt for Merck’s generics business unit, private equity firms have stated that they do not want fund Ranbaxy’s offer as the Indian drug maker does not want to give them an equity stake. Ranbaxy may offer equity only in a special purpose vehicle rather than in itself if it wins the bid. First round non-binding offers for the business, which is expected to fetch at least €4 bn ($5.2 bn), are due by Monday. Iceland’s Actavis and Ranbaxy have both said they want to acquire the business.

Meanwhile, the other Indian pharma companies in the race for the Merck bid, Dr. Reddy’s and Cipla, have opted out. Several global majors like Novartis, Teva, Actavis and private equity group Carlyle are said to be interested in the bidding.

Article in Reuters.com and DNA Money.
Related Posts:
Ranbaxy Laboratories to bid for Merck’s generic drug business
Ranbaxy Labs to set up SPV for Merck Generics bid

Bangalore-based Teleradiology forms JV with NHG Singapore

Bangalore-based teleradiology services company Teleradiology Solutions has entered a joint venture (JV) with the Singapore-based National Healthcare Group (NHG).

The joint venture company is called Tele Rad, Singapore. It will be based in Singapore and will operate in Asia initially and later spread to other markets. Both companies will invest Singapore $100,000 each. Tele Rad will market the products globally and source work to India. At present, NHG Singapore has nine polyclinics, four hospitals, one national centre and three specialty institutes. Singapore has a Free Trade Agreement (FTA) with the US, and handles hospital needs of the US servicemen both retired and those who are posted in Asia.

For the last three years, Teleradiology Solutions has been servicing NHG Singapore, through a service contract. As part of the contract, 45% of all primary healthcare records totaling 35,000 radiology scans are sent to Bangalore for reading.

For the uninitiated, teleradiology is the remote interpretation of all non-invasive imaging studies such as CT, MRI, ultrasound medicine studies and digitized X-rays.

Read the Business Standard article.

Raksha TPA and UAE-based business group form healthcare JV

Haryana-based Raksha TPA, India’s third-largest health insurance claims administrator, has set up a joint venture with UAE-based industrial conglomerate Rais Hassan Sadi in Dubai. Rais Hasan Sadi is a 92-year old business group with interests ranging from shipping to real estate. The JV, to be called as RHS-Raksha TPA, with Raksha holding 49% and RHS holding the balance, will seek to direct patients needing tertiary healthcare to hospitals in India. Tertiary healthcare is specialized medical services that include cancer care, neurosurgery and burns care.

Initially, RHS-Raksha will empanel hospitals in Abu Dhabi and Sharjah and later Oman for cashless treatment of health insurance policyholders. For tertiary care cases, the JV will consider sending patients to Raksha’s network of hospitals in India.

Ritu Nanda, chairperson and CEO of RNIS College of Insurance, and Rajan Nanda of Escorts together hold 60% stake in Raksha TPA and the other 40% is held by Naresh Trehan, executive director of Escorts Heart Institute.

Read the Business Standard article.

Temasek sells stake in Apollo Hospitals for Rs. 134 crores

Singapore government’s investment company Temasek Holdings has sold its entire holding of 5.26% stake in healthcare major Apollo Hospitals Enterprise for Rs. 133.68 crores. The stakes were held by two investment firms Maxwell Mauritius and Aranda Investments.

Maxwell Mauritius sold 2.079 mn shares, while Aranda Investments sold 640,000 shares for Rs. 491.50 each in a bulk deal in the open markets. Aranda Investments’ holding represented a 1.24% stake while that of Maxwell Mauritius represented 4.03% in the Chennai-based healthcare group.

Meanwhile, another fund house Fid Funds Mauritius of Fidelity Investments bought 2.94 mn shares (5.7%) of Apollo for around Rs. 144.62 crores at the same price Temasek’s units sold their stakes. Fidelity Select Portfolios Medical Delivery Portfolio already holds 723,000 shares representing a 1.4% stake in Apollo Hospitals.

Article in Business Standard.

Apollo Hospitals has UK-based Abbey Hospitals on its radar

Indian healthcare major Apollo Hospitals may bid for Abbey Hospitals, a UK-based hospital chain. Abbey Hospitals has been put up for sale by its parent company, the British healthcare group Covenant. It operates a chain of six hospitals. Any sale would happen at an estimated deal size of $100-150 mn. JP Morgan’s private equity arm, One Equity Capital is likely to partner Apollo Hospitals in the buyout. The fund already has investments in the Apollo Group companies.

Covenant Group is controlled by the Cognetes Fund. Cognetes acquired Covenant from Phoenix Private Equity for about $170 mn in 2005. Capio, the other identified target is also controlled by private equity funds Apax Partners and Nordic Capital. Deloitte is managing the sale process of Abbey and is expected to kick off the procedure in the next few weeks.

Read The Economic Times article.

Apollo Hospitals to buy UK-based healthcare unit

Apollo Hospitals is looking at acquiring a UK-based hospital chain estimated to be valued upwards of £1.2 bn, in partnership with private equity players. Apollo will provide its management expertise in such deals.

Apollo Hospitals has already expressed an interest in the British unit of Swedish healthcare company Capio that is owned by private equity groups Apax and Nordic Capital. The private equity owners of Capio were considering the sale of Capio’s British unit in response to antitrust concerns.

Apollo has also been looking at other hospitals including The Priory Group, owner of the famous rehabilitation centre for pop stars and fashion models. Priory Healthcare’s major shareholder ABN-AMRO has appointed Morgan Stanley to conduct a strategic review.

Read the Moneycontrol.com and Reuters.co.uk articles.

Iceland-based generics pharmaco Actavis acquires Sanmar Group’s API division

Iceland-headquartered generics pharma company Actavis has acquired the API (active pharmaceutical ingredient) manufacturing division of Sanmar Specialty Chemicals Limited (SSCL), a subsidiary of the Chennai-based Sanmar Group, for an undisclosed sum. The division will give Actavis a wholly-owned, FDA-approved facility as well as the ability to develop and manufacture its own APIs. Prior to the SSCL acquisition, Actavis has concluded two more acquisitions in India: Chennai-based Grandix Pharmaceuticals in December 2006 and Bangalore-based CRO (Contract Research Organisation) Lotus Laboratories in February 2005.

The SSCL division is located near Chennai and supplies APIs to international pharmaceutical companies, mostly in Europe and the US. The division currently manufactures 15 products and employs approximately 70 people. Actavis has also entered into a service agreement with SSCL to provide Actavis with API research and development services at SSCL’s research facilities. Actavis already has a wholly-owned, fully-operational API development centre set up in Bangalore. Actavis now has over 620 people employed in India, with operations in Chennai, Bangalore and Hyderabad. Actavis now has a total of 30 API projects under development in India.

Read The Economic Times and Business Standard articles.

Glenmark to acquire a Central European pharma company for Rs. 100 crores

Glenmark Pharmaceuticals is planning to acquire a front-end pharmaceutical company for about Rs. 100 crores to mark its foray in the European market. The target company is in Central Europe with a strong marketing force and some approved products and the deal is likely to be through before the end of March. The name of the company has not been disclosed. As of now, Glenmark just has an office in the UK for business development.

Read The Economic Times article.

GVFL to invest in 4 companies in the IT and biotech sectors

Gujarat Venture Fund Limited (GVFL), the Ahmedabad-based venture capital fund, plans to invest in four companies at seed and early stage-level in information technology and biotech sectors. The investments would be made out of the Gujarat IT Fund (corpus – Rs. 20 crores) and the Gujarat Biotechnology Venture Fund (corpus – Rs. 50 crores).

GVFL is evaluating several proposals including those from the IIM-Ahmedabad incubator and NirmaLabs for making these investments. The deals are expected to be announced soon. The fund is also looking to divest its stake in some of its portfolio companies such as eInfochips, Icenet and Anupam Globalsoft this year as they have matured and are capable of giving optimum returns.

GVFL had divested from 6 of its investee companies in 2006 including Saraf Foods, Scicom Technologies, Parsec Loans, Broadcast Worldwide, Technology Media Group and Apex Electricals. These exits were made through strategic buyouts by promoters or other investors. Private equity player Baring Private Equity picked up part of GVFL’s stake in Gurgaon-based Parsec Loans for around Rs. 15-16 crores. In Noida-based Scicom Technologies, the promoters and employees of the company bought out GVFL’s stake.

GVFL had recently closed its Rs. 24 crore-first fund called the GVCF 1990 with substantial profits. The biotech fund, set up with help from Gujarat government, has invested Rs. 2 crores in Celestial Biologicals, an Intas Pharma subsidiary. Celestial Biologicals makes protein drugs by plasma fractionation. In the last 16 years, GVFL has raised five venture capital funds with a combined capital of Rs. 140 crores and has made investments in 58 companies.

Read The Economic Times article.

Cipla joins hands with PE funds for Merck generics bid

Indian pharma major Cipla is teaming up with private equity funds to work out an innovative financing model for bidding for Merck’s generic business. While the acquisition will be funded by PE funds, Cipla will assume key management responsibilities of the generic division if the consortium wins the bid. The domestic drug major will get a percentage of the profits as a management contract fee and will also have the option of gradually increasing its stake in the generic business. Unconfirmed reports say that Cipla would annually get about 20% of the profits from Merck’s generics business and 2% additional stake every year. The name of the PE firms that Cipla is tying up with has not been disclosed yet.

Read more in The Economic Times article.

Alembic buys non-oncology division of Dabur Pharma

Alembic has acquired the domestic non-oncology formulation business of Dabur Pharma for a consideration of Rs. 159 crores. The acquisition will be funded through a combination of internal accruals and debt. The company may also exercise the option of diluting a small portion of its equity. The consideration of Rs. 159 crores is for the acquisition plus the actual net working capital.

Read the Indiainfoline.com article.

Avesthagen sells 20% stake for €25 mn

Bangalore-based integrated life sciences company Avestha Gengraine Technologies Limited (Avesthagen) has closed Series C of private equity fundraising of around €25 mn by divesting 20% equity to external investors. The investment values the company at € 115 mn (Rs. 667 crores). The investors in the company are Fidelity International (10%), the Limagrain Group of France (5%), Daninvest of the Danone Group (4.57%), and Bennett, Coleman & Company Limited (2.4%). The total foreign investment in the company is now over 31%. The existing investors of Avesthagen include ICICI Ventures, Cipla, Godrej Industries, Tata Industries and bioMerieux. The company has also commenced preparations for its initial public offering scheduled to hit the market by mid-2008.

The company commenced its operations as an agri-biotech company in 2001 and then moved on to become a healthcare technology company, pursing its vision of convergence of food, pharmaceuticals, and population genetics, leading to preventive personalized medicine. The other activity of the company has been agri-biotech product development of scientifically validated bioactive nutraceuticals, derived from Indian medicinal plants, as well as the development of bio-similar drugs. The company has four strategic business units: bio-pharmaceuticals, food for medicine (bio-nutritionals), seed for food (agri-biotech) and science and innovation. The company registered Rs. 1.1 crore in profit and Rs. 18 crore revenue in 2005-06.

The funds will be used for Avesthagen’s infrastructure expansion plans, including setting up of manufacturing units and research and development laboratories, and acquisition of technology companies to scale up production and marketing.

Read the article in Business Standard.

Unichem Labs to acquire Brazilian drug company

Pharma company Unichem Laboratories Limited is set to acquire a Brazilian drug company for about Rs. 110 crores. Unichem is at an advanced stage of negotiations with a firm that has a marketing network, a few product approvals, a warehouse and a quality control division.

The paper did not name the target firm but said the acquisition would be funded through internal accruals and debt. Unichem already has a presence in Brazil through a subsidiary, Unichem Farmaceutica do Brasil, but the deal would be struck by the parent and not the subsidiary.

Brazil’s pharmaceuticals market, estimated at about Rs. 386 bn, is growing at 32% a year.
Unichem is also planning an acquisition in the Indian market. It is on the lookout for a formulations company that has less than 20% brands clashing with Unichem’s portfolio.

In December, Unichem bought out the remaining 40% stake in UK-based subsidiary Niche Generics Limited, making it a wholly-owned unit.

Read the articles in The Economic Times – 1 2.

Ranbaxy Labs to set up SPV for Merck Generics bid

Ranbaxy Laboratories is considering using the frequently-employed technique of taking the special purpose vehicle (SPV) route for launching a bid on Merck’s generic business. If Ranbaxy decides to take the SPV route, the debt and private equity funds as well as Ranbaxy’s own funds will be infused into the SPV.

Merck is looking to sell its generics division, in a deal that could be valued at $5.2 bn. The generics business clocks revenues of around $2.5 bn and if Ranbaxy is able to acquire it, the Indian company’s revenues could nearly triple to around $3.8 bn (See Related Post). The bidding process and due diligence are expected to begin in February. Leading generic companies such as Teva and Sandoz and private equity majors such as Blackstone and KKR could be in the race as well. Ranbaxy has in the past secured shareholders approval to raise $1.5 bn out of which it has already raised $440 mn through FCCBs. Ranbaxy has also taken a 14.9% stake in Hyderabad-based Krebs Biochemicals and Industries for around Rs. 9 crores (See Related Post).

Read the article in The Economic Times.

Hyderabad-based API maker Krebs Biochemicals divests 14.9% stake to Ranbaxy

Ranbaxy Laboratories is buying a 14.9% stake in Krebs Biochemicals & Industries in a deal worth Rs. 9 crores. The acquisition falls just short of the trigger point of 15%, which calls for a mandatory open offer for a listed company in India. The promoter of Dr. Reddy’s Laboratories, Anji Reddy, also holds a 5.1% stake in Krebs in his personal capacity.

Krebs is a small Hyderabad-based publicly listed company promoted by its MD RT Ravi, engaged in the business of manufacturing active pharmaceutical ingredients (API). The company has a market capitalization of about Rs. 57 crores. It posted sales of about Rs. 40 crores for the first nine months of FY 2007. Last year Ranbaxy had expanded its in-house API manufacturing capacities by acquiring the Gwalior-based Cardinal Drugs. Ranbaxy has two manufacturing units for APIs in India, at Mohali and Toansa in Punjab.

Ranbaxy would pick up the equity through a preferential allotment at Rs. 85 per share. Krebs’ board had approved the allotment in its meeting held on January 15, 2007. The Krebs scrip moved up 4.98% to close at Rs 99.05 on Wednesday at the BSE. The stock has shot up 26.42% over the past week.

An immediate takeover of Krebs by Ranbaxy appears unlikely. Krebs’ board has also approved the issue of 20 lakh warrants to the promoter group and selected investors to be converted into equity at Rs 74.3 per share within 18 months from the date of allotment. If all the warrants are issued to the promoters, their stake would go up from 45% as of September 30, 2006. And upon conversion of these warrants Ranbaxy’s stake in Krebs would come down to about 11.6%.

Read the article in The Economic Times.

UK-based Metdist Group and Trinity Capital buy stake in Fortis Healthcare

Fortis Healthcare has issued equity shares in a pre-IPO placement to 2 UK-based firms. The company has signed pr-IPO placement agreements for allotment of 1 mn equity shares each to Raj Kumar Bagri and Apurv Bagri of Metdist Group and 2 mn shares to Trinity Capital. The Metdist Group is a global metal trading firm based in London and has a presence in Malaysia, Thailand, China, the UAE and India. Trinity was formed in 2006 to invest in real estate and real estate-related entities in India.

Fortis has already signed two pre-IPO placements, aggregating up to $33.33 mn (about Rs. 150 crores), with Quantum, Blue Ridge Partnership and Blue Ridge Offshore Master.

The equity issued as per pre-IPO placements would be subject to lock-in after the completion of the IPO as per SEBI regulations.

Read the articles in The Economic Times and Business Standard.

Dabur Pharma acquires Thailand-based Biosciences

Dabur India’s pharma subsidiary has acquired the sales and distribution network of a Thai-based associate. Dabur Pharma has acquired Biosciences its long-term partner in oncology products distribution and marketing, for an undisclosed amount. The deal will make the New Delhi-based Dabur Pharma the largest Asian company in the oncology segment.

The deal was funded from internal accruals. The company has been looking out for brand acquisitions for a long time and has also considered some products of the US-based Abbot Laboratories.

The $290 million Dabur Pharma is India’s largest player in the oncology segment and has marketing presence in more than 40 countries including the US and Europe. In addition to India and Thailand, it has major market share in South Asian countries such as Malaysia and Philippines. It develops, manufactures and markets a wide range of medicines from injectables and oral dosage forms to intermediates and active pharmaceutical ingredients across oncology and women’s health.

For more, read the articles in Business Standard and The Economic Times – 1 2.

Ranbaxy Laboratories to bid for Merck’s generic drug business

Ranbaxy Laboratories, India’s third-largest drug maker by market value, is planning to buy German pharma major Merck’s generic drug business, estimated to be worth more than €4 bn ($5.2 bn). If a deal is struck, Ranbaxy will become the third largest generic drug manufacturer in the world, behind Teva Pharmaceuticals of Israel and Swiss pharma company Novartis, with combined sales of $4 bn. Ranbaxy itself is valued at $3.5 bn, and aims to be one of the top five generic players in the world with $5 bn in annual sales by 2012.

Ranbaxy would likely be competing with other pharma companies such as Teva, Sandoz (Novartis’ generics division) and Sanofi-Aventis as well as private equity majors such as Blackstone and KKR, for acquiring the assets of Merck’s generic business. Ranbaxy hopes to be in the fray by January-end. The company is planning to raise finances for the acquisition through a mix of debt, equity and private equity.

In the year 2006, Ranbaxy laboratories had made six acquisitions – Be-Labs (South Africa), Ethimed NV (Belgium), Terapia (Romania) and the unbranded generic business of GlaxoSmithKline (GSK) in Germany and the Mundogen generic business of GSK in Spain.

Merck’s generics business has gross revenues of around $2.5 bn. The German company had announced last week that it was considering the sale of its generics division (Merck Generics) to raise resources for the acquisition of Swiss drug-maker Serono. Merck Generics has sales in more than 90 countries and accounts for the third largest generics business in the world. The division employs approximately 5,000 people world-wide.

A successful acquisition, besides tripling Ranbaxy’s topline, will give it greater access to key markets in the US, Europe and Japan. Moreover, with the Merck business not being vertically integrated, Ranbaxy can use its strengths in the active pharmaceutical ingredient (API) business to bring about greater cost synergies and efficiencies. It will also result in improved product flow, economies of scale and relative enhanced pricing power for Ranbaxy in the highly competitive generic industry.

Read more on this news from Reuters.com, Business Standard and The Economic Times – 1 2.

The Times Group invests in stem cell processing company LifeCell

LifeCell, a Chennai-based stem cell processing and banking facility, has divested stake to the Bennett, Coleman and Company (BCCL), proprietors of The Times of India and The Economic Times.

LifeCell was launched in November 2004 and is a pioneer in India for stem cell banking, research and therapy. It has 21 marketing and collection centres across India, and has enrolled over 5000 customers. LifeCell recently forayed into international markets with the launch of its Dubai operations and will soon expand its presence to Malaysia, Saudi Arabia, Sri Lanka, Singapore and Pakistan. It also has a technology tie-up with US-based CRYO-CELL International, which is the pioneer in the field of cord blood banking, and is the world’s biggest cord blood bank with over 130,000 members.

Read the article in The Economic Times.

Nicholas’ Wellspring buys Jankharia Imaging

Nicholas Piramal India-promoted pathology laboratories and diagnostic venture Wellspring has acquired Mumbai-based radiology and imaging centre Jankharia Imaging. The new entity would be renamed Wellspring-Jankharia Imaging. Following the acquisition Wellspring would be the first corporate diagnostic provider to enter into high-end health imaging services.

Wellspring is a chain of pathology labs and diagnostics centers spread across the country. It is present in more than 35 locations in India with over 50 processing labs.

Wellspring has ambitious investment plans in the next two years during which it would offer tele-radiology solutions requiring expert radiology opinions across India and abroad. It intends to have high end imaging centers across the country and would be looking for many more partners in key cities across India. It would also tap areas like public private partnership opportunities being offered by government-run medical college hospitals across the country.

Read the Business Standard and The Economic Times articles.

Aurobindo Pharma acquires Pharmacin

As reported earlier in our blog, Aurobindo Pharma has acquired a company in the Netherlands. The company happens to be Pharmacin International BV, a €6 mn generic pharma company. The acquisition was made through Aurobindo’s Dutch subsidiary Agile Pharma BV for an undisclosed sum. This is Aurobindo’s second acquisition in Europe after Milpharm in the UK in Feb 2006.

Agile Pharma acquired 100% of Pharmacin International B.V. from Jerim B.V. and Jonghoud International B.V. Pharmacin is engaged in supply and licensing of generics in Netherlands and in key markets in Europe. Pharmacin has over 200 product registrations for 63 customers in the Netherlands and Europe. Its strengths include cGMP warehouses close to Rotterdam, a strategic distribution location in Europe.

Read article from The Economic Times.
Related post: Aurobindo Pharma all set to buy a company in The Netherlands

Aurobindo Pharma all set to buy a company in The Netherlands

DNA Money reports that Aurobindo Pharma is all set to announce the acquisition of a formulations company in The Netherlands that will speed up the company’s European strategy. The board of directors has already approved the proposal and the deal will be announced on Friday subject to finalization of the price, say industry sources.

The transaction value is expected to be upwards of $20 mn. This will be the second European acquisition by Aurobindo Pharma after the acquisition of MilPharm in February 2006. The company being acquired has several marketing authorizations and will enable Aurobindo to expand in the market much faster apart from getting clearances for rest of Europe much faster. The acquired company had rights to 103 third-party products which were transferred to Aurobindo.

MilPharm, which had sales of 7.7 mn in 2005, was useful in front ending the company’s foray into the UK generics market where margins are much higher than in the US.

Trikona Capital to invest $18 mn in Fortis Healthcare

Trikona Capital is investing to the tune of $18 mn in Fortis Healthcare, a company promoted by the founders of Ranbaxy Laboratories. Earlier, George Soros’ Soros Private Equity Partners and Blue Ridge Capital were believed to have invested $50 mn in Fortis to buy a 10% stake in the company. Fortis has filed for an IPO and intends to raise Rs. 730 crores from the issue.

Fortis needs the funds to further its expansion plans as well as to write-off the debt it had incurred while acquiring Escorts Heart Institute and Research Centre. Fortis Healthcare has chalked out some meg-expansion plans, partly through acquisitions, which will require investments of Rs. 2250 crores by 2010.

Trikona Capital is a real estate-focused private equity firm; it is planning to invest around $1 bn in the Indian market in the next one year. So far, it has made investments of up to $150 million in India. Apart from Fortis, Trikona’s investments include a minority stake in IL&FS Transportation and Networks for $10 million, $20 million in an integrated township project in Thane, $22 million in a residential project in Mumbai and around $55 million in an IT park in Greater Noida. The fund also has partnerships with HDFC and IL&FS to make investments in India.

Read The Economic Times article.

Reliance Life close to $1 bn US buy; to invest £32.2 mn in UK-based GeneMedix

Reliance Life Sciences, the biotech arm of Reliance Industries Limited, may acquire a US company, operating in the genetics and nanotechnology space, for about a $1 bn, reports Business Standard.

In a related development, Reliance Life Sciences is planning to invest £32.2 mn ($63.2 mn) in UK bio-pharmaceutical company GeneMedix Plc. the initial investment will be made through subscription for around 1.1 bn shares at 1.25 pence to raise £14.6 mn, representing a controlling interest of 74% of the enlarged share capital of GeneMedix. Reliance may also further invest up to £17.5 mn in the company. Read Business Standard for more details.