Eris Lifesciences Ltd has signed an agreement to acquire 51 per cent in Swiss Parenterals Limited (SPL), for ₹637.50 crore. The move bolsters Eris’ presence in the sterile injectables segment.

Eris has been beefing-up its portfolio by buying brands from Biocon, Glenmark and Dr Reddy’s Laboratories, and the latest transaction is expected to close by March 31, 2024, the company said. In its presentation to investors, the company said, ₹200 crore would be paid at closing, while the remaining ₹437.50 crore will be paid 12 months from closing.

An additional 19 per cent stake in SPL will be acquired at closing by the Eris promoter group for ₹237.50 crore, and as a result collectively 70 per cent equity stake would be acquired by Eris and its promoter group, thereby minimising the additional debt on Eris balance sheet, the company said.

The remaining 30 per cent stake will be held by Naishadh Shah, Director of SPL who will be a long-term equity partner in the business and in charge of day-to-day operations and growth, it added. The purchase consideration payable by Eris at closing (₹200 crore) would be funded through debt financing, it said. SPL had clocked a turnover of ₹280 crore in the year 2022-23.

Q3 performance

On the company’s financial performance for the three months ended December 31, 2023, Amit Bakshi, Eris Lifesciences Chairman and Managing Director, said, “We continue to witness strong momentum, significant margin expansion and robust cash generation in our core domestic formulation business. We have a well-diversified portfolio with our emerging therapies accounting for nearly 30 per cent of our revenue and growing at 28 per cent. We continue to expand our R&D programme which now has 25+ active FDC candidates in the pipeline. Our insulin business continues to scale up well with a present revenue run-rate of ~ ₹5 crore per month. We will continue to drive value creation through our specialty focused strategy combined with flawless execution.”

The company’s revenue for the third quarter ended December 31, 2021 grew 15 per cent, at ₹486 crore, in the quarter under review. Profit after tax for the quarter under review, stood at ₹101 crore, marginally up from the same period last year. Net debt, on September 30, 2023, stood at ₹887 crore.