Pharmaceutical company SeQuent Scientific Ltd said on Friday unit Alivira Animal Health Ltd will acquire a 70 per cent stake in veterinary products maker Interchange Brazil for $3.6 million in cash, as it seeks to expand in the Latin American market.
Of the total amount, $2.2 million will be fresh infusion in Interchange to accelerate growth, SeQuent said in a filing to the stock exchanges.
This is the second transaction by SeQuent within six months in the animal health segment and third overall. In November 2015, Alivira agreed to acquire Turkey’s Topkim Premiks San at an enterprise value of about $7.2 million. In January, SeQuent bought a 51 per cent stake in Indo Phyto Chemicals Pvt Ltd for Rs 6.85 crore to enter the female healthcare segment.
The latest acquisition will be made through a step-down subsidiary in Brazil of Alivira Ireland, which is a wholly owned unit of Alivira.
“The acquisition provides us a foothold in the hugely attractive and fast-growing Brazilian market,” said Manish Gupta, managing director at Alivira.
Brazil’s veterinary market was estimated at $1.2 billion in 2015 and is growing at 10.5 per cent, which is twice the global growth, SeQuent said.
Interchange Brazil, which operates under the trade name Evance, focuses on poultry and swine segments. The company has a portfolio of about 25 registered products consisting of antimicrobials, parasiticides, sanitizers and products for therapeutic support.
The Brazilian company clocked sales of $5.8 million and had an EBITDA margin of 4 per cent in 2015.
The transaction, which is subject to customary closing conditions and approval of courts in Brazil, is likely to close by the end of June.
Mumbai-based SeQuent has seven manufacturing facilities in India and Turkey. The company makes bulk drugs and formulations in the animal health segment and offers niche human health and analytical services. It operates its animal health business through Alivira, which has close to 200 dosage forms.
In the animal health segment, drugmaker Cadila Healthcare Ltd acquired some veterinary product brands and manufacturing operations at Haridwar in Uttarakhand from US animal health company Zoetis Inc in January.
Last year, Novartis India completed a transaction to sell its animal health business to Elanco India, an affiliate of Eli Lilly. In April 2014, Novartis had agreed to sell its global animal health business to Eli Lilly and Co for about $5.4 billion.