Indian pharmaceutical company Natco Pharma Ltd has decided to acquire a 35.75% stake in South Africa’s Adcock Ingram Holdings Ltd for about Rs 2,000 crore, or almost $226 million, to expand its presence in the African market.
The Hyderabad-based drugmaker will also set up a subsidiary in the region, Natco Pharma South Africa Proprietary Ltd, with an initial investment of Rs 2,100 crore, the company said in a statement.
Adcock Ingram is a 135-year-old pharmaceutical company that manufactures prescription and over-the-counter generic and branded formulations. It also manufactures home care products.
Natco said it will buy about 51.64 million Adcock shares at a price of 75.00 South African rand ($4.27) apiece, totaling ZAR4 billion ($226 million). The all-cash transaction will be completed by December 2025, Natco said.
Johannesburg Stock Exchange-listed Bidvest Group Ltd will retain a 64.25% stake in Adcock, Natco said.
Adcock Ingram posted revenue of about $536 million for the year through June 2024 and $262 million for the first half of FY25. Its EBITDA was $78 million for FY24 and $38 million for the six months ended December 2024. The transaction values Adcock at a revenue multiple of 1.12x and an enterprise value-to-EBITDA multiple of 7.83x, Natco said.
Adcock was established in 1890 as a pharmacy in Krugersdorp, South Africa and evolved to be one of the biggest pharmaceutical and healthcare companies on the African continent. It is the second-largest South Africa-based pharmaceutical company in terms of private market share. Adcock owns three manufacturing facilities near Johannesburg and 49% of an Indian JV that runs two manufacturing facilities in India.
Natco has a presence across the globe, including in the US, Canada, Brazil, the Philippines, Singapore, Australia, Indonesia and the Middle East. The company reported consolidated revenue of Rs 4,429.5 crore for 2024-25, compared with Rs 3,998.8 crore in 2023-24. Profit after tax jumped to Rs 1,883.4 crore in 2024-25 from Rs 1,388.3 crore.
The transaction is subject to approval from the Reserve Bank of India and South African authorities.
