Mumbai: Announcing its second overseas acquisition this year, the Ahmedabad-based Cadila Healthcare Ltd said it has acquired Quimica e Farmaceutica Nikkho do Brasil Ltda (Nikkho), a mid-sized branded drugs company in Brazil, for $26 million (Rs107 crore). Based in Rio de Janeiro, Nikkho posted sales of $26 million in 2006.
Cadila (popularly known as Zydus Cadila) had in April this year acquired 100% stake in Nippon Universal Pharmaceutical Ltd, its joint venture partner in Japan, for an undisclosed amount.
Zydus is already present in the Brazilian non-branded drugs market through a wholly-owned subsidiary Zydus Healthcare Brasil Ltd. Pankaj R. Patel, chairman and managing director of Cadila, says this strategic acquisition in Brazil brings in the branded drugs business for his firm in that market. “Nikkho will be merged into our Brazilian subsidiary soon after the successful completion of the deal.”
The Brazilian pharma market is currently the largest of the Latin American markets, estimated at $8 billion. Cadila is making the acquisition through Zydus Healthcare Brazil; the acquisition is funded by internal accruals.
Founded in the 1960s, Nikkho caters only to the Brazilian prescription drugs market. It has a sales force of 125 and a product portfolio that includes general medicine, pediatrics, gynaecology, neurology, gastroenterology, ENT and head and neck disorders and dermatology?drugs, etc. Nikkho currently markets 22 products under 13 different brands. It also has nearly 50 to-be-launched registered brands.
“Nikkho’s ready manufacturing facility will benefit Zydus in the long run as the changing regulatory landscape in Brazil could make it mandatory for pharma companies to have a manufacturing base in the country,” says Patel. “We’ve been looking at acquisitions that can add value to operations in our key, focused markets, as part of our global expansion strategy. The Brazilian market is a reasonably large and growing market for us now.” he adds.
Brazil is currently one of the fast-growing generic markets in the world. Zydus Cadila had set up its Brazilian subsidiary in 2002. It already has registered 13 products. Zydus, with a turnover of Rs1,800 crore in 2006-07, has been expanding its global operations for the last several years.