The Hindu Business Line : Arch PharmaLabs acquires Watsol Organics

The acquisition gives Arch PharmaLabs access to raw materials and pharmaceutical and agro-chemical intermediates and has been funded entirely through internal accruals, said Mr Ajit Kamath, Chairman and Managing Director.

Arch PharmaLabs, with strengths in API (active pharma ingredients) and intermediates, plans to immediately invest about Rs 30 crore in the expansion of Watsol Organics. More than 100 professionals would be employed in the subsidiary, which has 77 employees and is spread over 40 acres near Siddipet, on the outskirts of Hyderabad.

Targeting a turnover of over Rs 500 crore during the fiscal 2007-08, Arch PharmaLabs has taken up expansion in most of its six facilities across the country. In Gurgoan, about Rs 65 crore would be invested, Mr Kamath told newspersons.

Arch PharmaLabs had, in March last, acquired Sibra Pharmaceuticals, which has strengths in anti-retrovirals, for a consideration of Rs 40 crore. It plans to invest Rs 40 crore in expansion, Mr Kamath said.

“We are not going to shy away from further acquisitions in future as it has been fruitful in our growth strategy. Thanks to the five acquisitions so far, the company has grown and is closing in on Rs 500-crore turnover,” he said. A combination of private equity, debt and internal accruals has been used for acquisitions. ICICI Venture, Swisstec and ILFS are major investors with 58 per cent equity among them. Arch PharmaLabs has an equity base of Rs 16.08 crore and net worth of Rs 200 crore, the CMD said.

The company has received four rounds of investment in the last few years, totalling over Rs 100 crore. The latest being Rs 45 crore from DEG, Germany. “We have already reached financial closure for our expansions,” Mr Kamath added.

More Stories on : Mergers & Acquisitions | Pharmaceuticals

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