Laurus buys Richcore

With the acquisition of a 72.55 per cent stake in Richcore Lifesciences for around ₹247 crore, pharmaceutical firm Laurus Labs will be tapping into the fast-growing biosimilars and biotechnology market. The deal gives Laurus Labs ready access to the biotech space along with captive fermentation capacities, thereby enabling vertical integration.

Richcore’s existing fermentation plant has a capacity of 10,750 litres. With the addition of the new plant (180,000 litres), which will be operational by Q4 FY21, this capacity will multiply severalfold. For FY20 and half-year ended September 2020, Richcore generated revenue of ₹41 crore and ₹29 crore, respectively. Revenue from the existing commercialised and the new plant is expected to be ₹140 crore in FY22. Taking this into account, the acquisition price to revenue multiple comes to around 1.76 times.

Laurus Labs’existing business comprises manufacturing generic APIs and generic formulations, and contract development and manufacturing for global pharma companies. The addition of Richcore’s business will help Laurus Labs diversify its revenue base.