Plethico to pay $23.3M to Aurobindo for settling dispute over Natrol

Indore-based pharmaceutical company Plethico Pharmaceuticals Ltd has agreed to pay $23.3 million to Aurobindo Pharma Ltd, a Hyderabad-based drugmaker, in cash in milestone payments, certain global IP rights and other assets for settlement over acquisition of Natrol as per a stock market disclosure.

Aurobindo Pharma through its subsidiary Aurobindo Pharma USA Inc had acquired American nutritional supplement maker, Natrol Inc and other affiliate entities (Natrol) in December last year. The transaction was done through a bidding process and Aurobindo emerged as the highest bidder for acquisition of Natrol and paid $132.5 million (Rs 815 crore then).

The acquisition included manufacturing assets, personnel, commercial infrastructure and nutraceutical brands of Natrol in the US along with an agreement to take certain liabilities with a bid of $132.5 million. 

"On April 6, 2015, Natrol LLC owned by Aurobindo had approached the Delaware Bankruptcy Court in respect of acquisition of assets of Natrol, USA regarding certain discrepancies and non-performance of obligations by erstwhile owners, Plethico. Subsequently, discussions were held between Natrol LLC and Plethico group for resolution," the company said.

"Based on the discussions, a settlement agreement has been reached, wherein Plethico group would assign $23.3 million in cash in milestone payments, certain global IP rights and other assets," Aurobindo said.

Founded in 1986, Aurobindo Pharma manufactures active pharmaceutical ingredients, intermediates and generic formulations. The firm got listed in 1992.

For the quarter ended December 31, 2014, Aurobindo Pharma's net sales increased by over 47 per cent to Rs 3,142.5 crore, while its consolidated profit declined to Rs 382.4 crore from Rs 416.1 crore in the same period a year ago.

Aurobindo Pharma's scrip was trading at Rs 1,327.10, up 0.30 per cent on BSE in a strong Mumbai market on Thursday at 3.15 PM.

(Edited by Joby Puthuparampil Johnson)

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