Strides to exit Australia, announces acquisitions in North America2 min read . Updated: 30 Jan 2019, 01:06 AM IST
- Strides Pharma Global, has approved the sale of its entire business in Australia for Australian $394 million\
- The drug maker also said its step down subsidiary Strides Pharma Canada Inc. has entered into an arrangement to acquire 80% stake in Pharmapar Inc. for $3 million
Strides Pharma Science Ltd will exit Australia while acquiring a company each in the US and Canada in a major revamp of its international operations.
The Bengaluru-based company said its unit, Strides Pharma Global, has approved the sale of its entire business in Australia for Australian $394 million (approximately $282 million).
Strides re-entered Australia in September 2015 as Arrow, through the acquisition of generics portfolio from Aspen Pharmacare Holdings Ltd for Australian $380 million.
“Strides will sell its complete stake in Arrow to entities owned and operated by Dennis Bastas, executive chairman and co-founder of Arrow. Arrow will merge with Apotex to create the new entity – Arrotex," the company said in a regulatory filing.
Strides will enter into a 10-year preferred supply agreement with Arrotex. The company said it will retain the IP of 140 products in the Arrow portfolio with fungibility in other global markets including key regulated markets. The deal would be immediately EPS accretive, it added.
The drug maker will receive Australian $300 million as upfront payment at the closure of the transaction while the remainder will be deferred through a secured instrument.
Strides will use the proceeds to pare its debt by $150-160 million to strengthen its balance sheet and will look to infuse $90-100 million as growth capital in other markets where it operates.
Also on Tuesday, Strides said it will acquire US-based Vensun Pharmaceuticals Inc. for around $18 million.
Vensun was founded in 2011 with an asset-light partner-driven business model to develop products for the US generics market.
The drug maker also said its step down subsidiary Strides Pharma Canada Inc. has entered into an arrangement to acquire 80% stake in Pharmapar Inc., a Canada-based specialised generics front end company for $3 million.
Founded in 1998, Pharmapar specializes in generic medication to privately insured individuals in Canada. The acquisition will help Strides foray in Canada, which is a new market for the company and one of top 10 global pharmaceutical markets, the company said.
The company will also acquire full control of its joint venture with pharma company Vivimed Labs Ltd.
“Strides Pharma Science and its step down subsidiary Strides Pharma Global Pte. Ltd have approved to convert their 50:50 JVs with Vivimed to 100% ownership. Consequently, Strides will acquire balance 50% stake in Vivimed Life Sciences Pvt Ltd and its step down subsidiary, Strides Pharma Global Pte, Singapore will acquire the balance 50% stake in Strides Vivimed Pte Ltd, to own and operate the erstwhile joint venture companies fully," the company said.
Shares of Strides Pharma closed 2.56% lower at ₹492.4 per share on the BSE, underperforming a flat Mumbai market.