Granules India acquiring Auctus Pharma

Hyderabad-based pharmaceutical firm Granules India Ltd is acquiring privately held active pharmaceutical ingredients (API) company Auctus Pharma Ltd, as per a stock market disclosure.

The transaction value is pegged at Rs 102 crore or $16.5 million.

Auctus Pharma, which has an API facility in JN Pharma City near Visakhapatnam and an intermediate facility at Bonthapally.

“The API facility of Auctus has approvals from various leading regulatory agencies, including US FDA, EDQM, Health Canada and WHO-GMP,” the company said in the release. The transaction is expected to be completed in three-six months.

The product portfolio of Auctus Pharma consists of 12 APIs belonging to various therapeutic categories and services companies across fifty countries. The company clocked revenue of Rs 121 crore in FY13.

“The acquisition of Auctus fits into our strategy of being a fully integrated manufacturer while diversifying our product portfolio by adding high valued products with significant market demand. Auctus provides Granules with a meaningful API platform with a US FDA approved site to strengthen our finishing dosage division,” said Krishna Prasad, managing director of Granules India.

Further, Granules also announced the opening of a 10,000 sq ft R&D facility in Hyderabad which will focus on full-scale generic API development and will supplement the company’s existing R&D facility in Pune.

“In order to accelerate growth with a sustainable development engine we have established a new R&D facility to enable finished dosage filing of our new APIs,” Prasad said.

The company has also announced that it is revising borrowing power limit of its board of directors from Rs 300 crore to Rs 750 crore. For FY13, the company clocked revenue of Rs 764 crore and net profit of Rs 32.5 crore. In the first six months of this year, the company posted net sales of Rs 494 crore with net profit of Rs 29.8 crore. In the past, it raised funding from IFC.

Granules India, which produces finished dosages, pharmaceutical formulation intermediates and APIs, services over 300 companies in 60 countries. Its products include Paracetamol, Ibuprofen and Metformina.

Two years ago, the company announced a joint venture with Belgian-based fine chemicals manufacturer OmniChem (a part of Ajinomoto OmniChem) to launch a facility in Pharma City special economic zone (SEZ) in Visakhapatnam, Andhra Pradesh with capital expenditure of $20 million.

Indian pharmaceutical space has witnessed close to two dozen deals this calendar year of which around half have been domestic deals, according to VCCEdge, the financial research platform of VCCircle. Some of the recent announced transactions include Piramal Enterprise acquiring Caladryl brand rights for India from Valeant Pharmaceuticals, Kilitch Drugs acquiring stake in NBZ Pharma and Aurobindo Pharma acquiring Hyderabad based Hyacinth Pharma among others.

(Edited by Joby Puthuparampil Johnson)

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