German healthcare products major B Braun is acquiring majority stake in public-listed formulations and healthcare consumables firm Ahlcon Parenterals (India) Ltd in a deal valuing the company at Rs 331 crore ($65 million).
Braun has come up with an open offer to buy 1.87 million shares comprising 26 per cent stake from the public at Rs 460 a piece. This is 36 per cent premium to the last-traded share price of Ahlcon before the deal was announced.
Ahlcon scrip rose 5 per cent to hit the upper circuit for the day at Rs 355.5 a share on the BSE on Thursday in a flat Mumbai market.
Ahlcon had revenues of Rs 78.65 crore, with net profit of Rs 5.77 crore for trailing four quarters ended December 31, 2011. In the same period, the firm had EBITDA of Rs 14.46 crore. This means Braun has valued Ahlcon at 23x its trailing EBITDA and over 57x its trailing net profit, as per VCCircle estimates.
Delhi-based Ahlcon is a two-decade-old firm engaged in the business of parenterals and manufacturers life-saving intravenous fluids and medical disposals. According to its website, Ahlcon has an installed capacity of 30 million bottles per annum for large-volume parenterals besides 150 million vials of eye drops and injections – both in transparent and white opaque packs – as small volume parenterals. It has a manufacturing unit at Bhiwadi at Rajasthan. The promoter group, led by Bikramjit Ahluwalia, holds 70.9 per cent stake in the public-listed company.
As per the share purchase agreement, Braun will acquire shares from the promoters and the public to pick up to 75 per cent stake in the company. If the open offer is not too successful and it manages to garner just about 4 per cent or less stake from the public, it would buy out the entire holding of the promoters.
This means the promoters will sell out anywhere between 49 per cent and 70.9 per cent of their holding to Braun as a part of the transaction. Given this, Braun will pay the promoters anywhere between Rs 162 crore and Rs 235 crore. Therefore, in total, Braun could end up paying around Rs 250 crore ($50 million).