The Hindu Business Line : Strides set for domestic foray, bids for Grandix brands

Bangalore April 10 Strides Arcolab on Tuesday made its first move towards domestic market foray by unveiling a plan to buy all the brands of Chennai-based Grandix Pharmaceuticals.

This would be the first inorganic growth pitch within India for the 17-year-old Strides. Mr Arun Kumar, Vice-Chairman & Managing Director of the generic and specialty products export major, told Business Line, "Our intention is to kickstart our branded entry in the Indian market with this inorganic move. We have had no Indian market presence."

Begins due diligence

Strides is now in an exclusive negotiation with Grandix and has begun due diligence of all its brands. The Grandix brands have sales of Rs 50 crore across seven States. The valuation exercise should be completed by June this year, Mr Arun Kumar said.

As part of the India growth plan, it was looking at expanding its South-based operations towards north India, he said, without giving details.

The Grandix range includes anti-diabetic, anti-hypertensive and painkiller products. Grandix's turnover in 2006-07 was around Rs 100 crore. Only in December 2006, it sold its manufacturing plant at Alathur near Chennai to Iceland-based generics major, Actavis, for an undisclosed sum.

Strides, which closed fiscal 2006 with a group turnover of Rs 760 crore, operates in 55 markets and has a strong Latin American presence. In the recent three years, it made full or majority acquisitions of drug companies in Poland, Italy and Brazil. The latest was a Rs 60-crore deal in September 2006 to fully acquire Singapore's Drug Houses of Australia (Asia) P Ltd to drive its China and Asia-Pacific plans.

Mr Arun Kumar said the company had kept out of the domestic market as "this requires a high level of dedication". It was now focussing on the Asian business for which an Indian presence was necessary. In this market, building a branded presence from scratch would be complex and hence the acquisition, he said.

The company's statement to the BSE said, "The board of directors of the company has given its in-principle approval to acquire the entire shareholding of Grandix Pharmaceuticals Ltd (Grandix), Chennai, from the existing shareholders of Grandix."

Strides is among the top five global soft gelatin capsule makers and is planning to be a key ARV (anti-retroviral drug) supplier to the US, having got the USFDA approval for ten of its drug applications.

Strides also announced the resignation of one of its directors, Mr Francis J. Pinto, from the board.

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