The Hindu Business Line : Piramal Healthcare to buy Minrad for Rs 196 cr

Mumbai, Dec. 23 Piramal Healthcare Ltd is set to strengthen its global presence in critical care with the acquisition of Minrad International Inc for $40 million or about Rs 196 crore.

Minrad is a generic inhalation anaesthetics company and as per the agreement, it will merge with a newly incorporated wholly owned subsidiary of Piramal Healthcare.

The deal will give Piramal Healthcare access to intellectual property for making inhalation anaesthetics, giving it immediate entry into the US market for the country’s largest selling inhalation anaesthetic sevoflurane, said the Chairman, Mr Ajay Piramal. Pending shareholder and other approvals, the deal is expected to be completed by the first quarter of 2009.

The company has been gradually consolidating its presence in the critical care space, with the buy of Rhodia’s Inhalation Anaesthetics business in December 2004 for $14 million (about Rs 61 crore).

Another acquisition in this space was earlier this year when it acquired the ‘Haemaccel’ brand of blood plasma products from Germany’s PlasmaSelect AG for a cash consideration of €7.7 million (about Rs 53 crore).

Piramal Healthcare has also provided Minrad with a senior secured loan of $12 million to provide capital for its operations in the period preceding the closing of the merger.

The transaction is expected to be accretive to its earnings for the fiscal year ending March 31, 2010.

Explaining Minrad’s losses, Mr Piramal said, “they have spent a lot of money in research and development and they haven’t been able to realise. They have also spent on too many products at the same time.” He added, “It was too much for a young company to spend.”

Expected revenue

Piramal Healthcare’s revenues from critical care is about $25 million and the company expects this to rise to $100 million by 2009-10, buoyed by $65 million, which is the revenue expected from Minrad.

Piramal Healthcare is among the leading producers of halothane and isoflurane, while Minrad’s product portfolio of inhalation anaesthetics consists of isoflurane, enflurane and sevoflurane, the company said. Further, the company said, Minrad has filed an Abbreviated New Drug Application for desflurane with the US Food and Drug Administration . Minrad’s two manufacturing units will also go into the Piramal fold.

The combined company will have a marketing and sales network across 108 countries with 178 distributors that will be able to supply anaesthetic products to supply chain vendors and end users, including hospitals, pain management clinics, veterinary hospitals, university research centres, and medical industrial users.

Minrad shareholders will receive $0.12 per share in cash, when the merger is completed. Piramal Healthcare has also agreed to acquire Minrad’s 8 per cent Senior Secured Convertible Notes from the note holders, a release from the company said.

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