【MUMBAI】Debt-ridden Elder Pharmaceuticals has agreed to sell its branded domestic formulations business in India and Nepal to Ahmedabad-based Torrent Pharmaceuticals for Rs 2,004 crore. The two companies have entered into a definitive agreement.
The deal will help Rs 3,212-crore Torrent to widen its market share and bolster its total turnover to 4,831 crore and Elder to cut debts and restructure operations.
The business comprises women's care, pain management, wound care and neutraceuticals or vitamins, the combined revenues for which are estimated at around R350-400 crore for trailing 12 months, valuing the deal at 4.5-5 times sales. At the retail level the revenues for the portfolio are estimated at close to R550 crore.
The transaction would also involve the transfer of employees engaged in sales, marketing and operations of the India business. Under the proposed transaction, Elder would continue to manufacture and supply products at its manufacturing facilities for Torrent for three years, a statement said.
Analysts point out that given that Cadila acquired Biochem in a similar transaction for a smaller valuation, albeit in 2011, Torrent's purchase is somewhat expensive.
Torrent has said it will fund the acquisition through a mix of internal accruals and bank borrowings; the company's cash and cash equivalents amount to R939 crore and the firm had a total debt of R913 crore as on September 30, Bloomberg data show.
【News source】
Torrent Pharma to buy Elder's India business for Rs 2,000 cr
Torrent Pharma acquires Elder’s domestic business for Rs 2000 crore
Torrent to buy Elder’s branded formulations
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