The Hindu Business Line : Strides Arcolab plans domestic launch of branded drugs, nutraceuticals

Bangalore, Sept. 18 Strides Arcolab Ltd plans to use the Grandix label to launch its branded drugs and nutraceuticals in India and other emerging markets, according to the Bangalore-based company’s notification to the bourses.

The move is part of its recent restructuring of businesses into three segments — manufacturing and R&D, international front-ended business (generics), and brands and nutraceuticals, according to a company release. Further details were not available immediately.

Strides bought the Chennai-based Grandix Pharmaceuticals in June last year for Rs 100 crore as the vehicle for its domestic foray.

STAKE SALE

As a consequence of the rearrangement, it has also revised the terms of sale of its Latin American (Latam) operations to South African partner Aspen Pharmacare.

Strides was to sell 50 per cent interest in its Latam operations to Aspen by a 2007 agreement. It will now sell an additional 1 per cent and cede management control to Aspen after June 2009.

Aspen’s Web site said its arm, Aspen Global, “acquired a 50 per cent interest in (Strides’) Latam operations for an initial investment of $152.5 million (over Rs 700 crore). Aspen Global will now acquire an additional 1 per cent interest via the acquisition of shares from Strides for $ 2.8 million (around Rs 13 crore).”

The Strides release said, “Further to the announcement made in November 2007 and March 2008, Strides has agreed to cede controlling interest in the Latam operations to Aspen and will now hold 49 per cent equity in the company until June 30, 2009.”

It further said, “The transfer of controlling interests values the Latam business at $280 million (around Rs 1,300 crore). The effective sale consideration for the entire share capital of the Latam operations will amount to 9.32 times the EBITDA up to $11.94 million plus 11.18 times the EBITDA over $11.94 million.”

Mr Arun Kumar, Vice-Chairman and Group Chief Executive Officer of Strides, said, “Consequent to these changes and with the integration of Ascent Pharmahealth Business in Australia (the erstwhile Genepharm) into the group, Strides has strongly positioned itself to accelerate growth.”