Japan’s Meiji buying Temasek-backed drugmaker Medreich for $290M

Meiji Seika Pharma, a part of Meiji Holdings Co. Ltd, has signed a deal to acquire Medreich Ltd, a Bangalore-based contract manufacturing pharmaceutical company, for $290 million (Rs 1,720 crore). This acquisition will also mark an exit for Singapore’s sovereign fund Temasek, which had invested in the company way back in 2005.

One source said Temasek held close to 33 per cent in Medreich, which it had picked through an allotment nine years ago for around Rs 112 crore ($25 million). This means it is exiting with 5.1x in local currency and 3.9x in dollar terms in its nine-year-old bet on the firm.

Separate media reports, however, stated Temasek held 25 per cent stake in Medreich, which could mean 3x exit in dollar terms and 3.9x in local currency.

Medreich has three promoters—Rajeev Mehta, Keith De Souza and C P Bothra besides financial investor Temasek. As part of the deal, Meiji will buy out shares held by all of them, including their holding companies.

Medreich has a manufacturing facility in India and is globally engaged in CMO/CDMO businesses as well as manufacturing and sales of generic drugs in Europe, Asia, Australia, New Zealand and Africa. It has a number of well established business partners like GSK, Adcock Ingram, Pfizer, Sanofi, Novartis and Mylan.

It is also involved in manufacturing and marketing of a range of pharmaceutical products in various dosage forms catering to diverse therapeutic categories, including anti-infective, multivitamins, analgesics and antihistamines.

The company had revenues of $157 million with operating profit of $24 million and net profit of $11 million for the year ended March 31, 2013.

This acquisition will help Meiji expand its generic drugs portfolio and gain a foothold in India and help it leverage Medreich’s geographical reach.

Japanese drugmakers have been active in snapping Indian pharma companies in the past. While, Daiichi Sankyo acquired controlling stake in Ranbaxy Laboratories in a deal which later turned out to be a loss making proposition, in the recent past Otsuka Pharmaceutical Factory Inc. and Mitsui and Co. Ltd. acquired majority stake in the infusion business of Claris Lifesciences Ltd for $193.17 million.

(Edited by Joby Puthuparampil Johnson)

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