Mumbai-based pharmaceutical firm Ipca Laboratories on Monday said it will acquire a 33.38% stake in specialty pharmaceutical company Unichem Laboratories for Rs 1,034 crore.
In addition, Ipca Laboratories' board of directors has given nod for an open offer to Unichems' public shareholders, inviting them to sell up to 26% of the fully diluted outstanding equity share capital of the company for Rs 440 per share, aggregating to Rs 805.44 crore.
If the open offer is fully successful, Ipca will shell out a total of almost Rs 1,840 crore (about $225 million) to buy a 59.38% stake in Unichem.
The transaction is subject to the fulfillment of the terms and conditions as per the share purchase agreement, and regulatory approvals from the Competition Commission of India, as per a disclosure.
IPCA Labs aims to fund the cash consideration from the company's retained earnings. As of March 2022, the company had reserves of Rs 5,498 crore.
Unichem Laboratories, founded in 1944, is engaged in the manufacture and marketing of a basket of pharmaceutical formulations as branded generics, as well as generics in several countries across the globe, including major markets such as the United States and Europe.
It operates facilities in Goa, Ghaziabad (Uttar Pradesh), and Baddi (Himachal Pradesh), and has active pharmaceutical ingredient (API) manufacturing facilities located at Roha, Kolhapur (Maharashtra), and Pithampur (Madhya Pradesh).
Unichem’s operating income stood at Rs 1,270 crore in the fiscal year 2022, against Rs 1,235 crore in 2021.
"This acquisition is in line with our stated strategy to enhance our portfolio in our chosen growth markets. Unichem has developed an excellent and proven quality track record with a differentiated capability that is highly complementary to Ipca's strengths. We are well positioned to successfully integrate our product offerings and grow our businesses," said Premchand Godha, Promoter and Executive Chairman of Ipca Laboratories.
Established in 1949, Ipca Laboratories produces finished dosage forms and active pharmaceutical ingredients.
For the first quarter of fiscal 2023, Ipca Laboratories’ operating income and profit after tax (PAT) were Rs 1,586 crore and Rs 145 crore, respectively, against Rs 1,566 crore and Rs 307 crore for the corresponding quarter in the previous fiscal.
In 2018, Ipca Laboratories acquired US-based Pisgah Labs Inc for $9.65 million through its US subsidiary. The company also acquired Onyx Scientific for around $7.5 million in 2011.