Aurobindo Pharma Ltd said Monday it has agreed to sell its American nutritional supplement making unit Natrol Inc. for $550 million (Rs 4,048 crore), six year after buying the company.
The Indian drugmaker is selling Natrol to US-based alternative investment manager New Mountain Capital, it said in a stock market disclosure.
Natrol will be combined with Jarrow Formulas, a US-based formulator and supplier of nutritional supplements.
The Indian drugmaker will use the proceeds from this sale to cut debt and for other new strategic initiatives, Aurobindo said, without giving any details.
Aurobindo had emerged as the highest bidder for the acquisition of Natrol and its affiliates in November 2014. It had bid $132.5 million (Rs 815 crore then) to buy Natrol, which was under bankruptcy protection.
The Indian drugmaker said that Natrol has been a consistently profitable business since its acquisition. Natrol’s annual sales for the year ended March 31, 2020, were about $157 million.
Jefferies served as the sole financial adviser to Aurobindo. Sullivan & Cromwell LLP acted as legal counsel.
Aurobindo’s dealmaking activities
The company’s product portfolio is spread across seven major therapeutic areas including antibiotics, antiretrovirals gastroenterological, anti-allergies and antidiabetics. The company sells these products in over 150 countries.
Earlier this month, the drugmaker took full control of its joint venture Eugia by buying the remaining stake from its partner Celon Labs, which is backed by Sequoia Capital.
In January last year, Aurobindo had agreed to buy seven branded oncology injectables from US-based Spectrum Pharmaceuticals Inc. for up to $300 million.
In 2018, Aurobindo signed a pact to acquire the commercial operations and certain supporting infrastructure assets of Canadian pharmaceutical firm Apotex International Inc. in five European countries for about $86.5 million.
Also in 2018, Aurobindo agreed to purchase Sandoz’s US dermatology and generic pills business for as much as $1 billion. The deal would have been the biggest overseas acquisition by an Indian drugmaker, but it fell apart earlier this year.
Had the Sandoz deal gone through it would have made Aurobindo the second-largest generic player in the dermatology segment in the US, managing director N. Govindarajan said in the annual report for 2019-20.
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