The Hindu Business Line : Strides Arcolab completes 50.1% acquisition of Genepharm

Bangalore, Aug. 1 Generics and specialty medicine major Strides Arcolab said it has completed the acquisition of a controlling 50.1 per cent stake in listed Australian pharma company Genepharm Australasia Ltd. The Melbourne-based company is to be renamed Ascent Pharmahealth Ltd. Post-deal, Strides put its Australasia operations at $90 million (around Rs 360 crore). The transaction announced in February this year gives Strides a significant presence in the highly-regulated Australian market and makes it the fourth largest generics company there.

The Bangalore-based company said that by September this year, it may raise its stake in Ascent to 55 per cent, including the assets of a fully-owned Strides subsidiary in Singapore, DHA (Drug Houses of Australia). Strides’ share price closed almost unchanged at Rs 175 on the BSE on Friday.

Ascent, the five-year-old generics and cosmeceuticals major, ranks as Australia’s No. 2 listed generics player. In the cashless transaction, Strides had to cede its South East Asian operations excluding China and Japan for the stake; these accounted for revenues of around Rs 114 crore (A$ 32.5 million) for the year ended June 2008.

The activities included manufacturing and OTC distribution in Singapore, Malaysia, Thailand, Vietnam, Hong Kong and Australia. DHA now becomes Ascent’s Asian launch pad.

Mr Arun Kumar, Strides Vice-Chairman and Group CEO, said, “Australia and the emerging markets of Asia are important for Strides. With Asia growing three times in comparison with Western markets, we strongly believe that Ascent Pharmahealth is positioned to become a leader in these markets.”

The partners have signed a five-year preferred supply agreement in their respective bases, excluding Strides’ products for AIDS, tuberculosis and malaria in Australia, New Zealand and South-East Asia.

According to Mr T. S. Rangan, Group CFO, it would be a matching of Strides’ low-cost manufacturing in India and the Australasian partner’s OTC sales and distribution skills to significantly improve profitability. Strides would take its nutraceuticals and wellness products, off-patent generics, anti-hypertensive and cholesterol lowering drugs to the new markets.

Mr Arun Kumar and Mr Ravi Seth, Strides CEO — International Operations, will join the Ascent board. Mr Dennis Bastas remains Ascent CEO while Mr Mark Bisset, Regional Director for Strides’ Australasian operations, will be part of its senior management.

Related Stories:
Strides Arcolab set to take majority stake in Australia’s Genepharm

More Stories on : Mergers & Acquisitions | Pharmaceuticals

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