Strides Arcolab to buy Aspen’s Australian business
Once the A$380 mn deal is completed, it may put Strides among the top 3 generic drugs suppliers in Australia
Johannesburg: Strides Arcolab Ltd on Thursday said it had agreed to buy the Australian generics business of Aspen Pharmacare Holdings Ltd for Australian $380 million.
The funds needed for this acquisition will be raised through a combination of debt and internal accruals. Strides Arcolab exited the Australian market in 2012 by selling its unit Ascent Pharmahealth Ltd to Watson Pharmaceuticals Inc. for A$375 million.
“The Australian generic pharmaceuticals market has always been very successful for Strides. The Aspen Australian generic pharmaceutical assets are a valuable and unique platform for Strides to rebuild its business in Australia. Strong local management, a market-leading product portfolio supported by our in-house cost effective manufacturing will be the key ingredients of our strategy for Australia," said Arun Kumar, founder and group chief executive of Strides Arcolab.
Once the deal is completed by the end of the second quarter, it may place Strides among the top three generic drugs suppliers in Australia and among the top 10 drug makers in the Australian pharmaceuticals market, the company said in a statement.
The 140 prescription drugs that Strides will acquire had sales of around A$120 million in the fiscal year to June 2014.
The deal comes at a time when Indian pharmaceutical companies are increasingly looking abroad to broaden their product portfolios and fuel growth.
For instance, Sun Pharmaceuticals Industries Ltd, which acquired domestic rival Ranbaxy in a $3.2 billion deal, said recently that it was open to acquiring another company provided it was a good fit and did not pose integration issues.
Last year, Aurobindo Pharma bought out certain assets of Actavis Plc and Natrol Plc, while Dr Reddy’s bought Habitrol from Novartis AG’s consumer health arm.
Large pharmaceutical manufacturers will continue to look for inorganic growth opportunities in India and abroad while also expanding organically in the current financial year, said a February report from India Ratings.
Strides Arcolab’s acquisitions of Bafna Pharma Ltd’s branded generics business and Shasun Pharmaceuticals Ltd in 2014 indicate an emerging trend of Indian companies making small, focused acquisitions to gain access to manufacturing facilities and product portfolios, the ratings and research agency said.
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