Singapore-based speciality biopharmaceutical company Invida Group Private Limited has acquired the dermatology and baby care product brands of Delhi-based Shalaks Pharmaceuticals Pvt. Ltd. for Rs 100 crore. The transaction also includes acquisition of trademarks and technical know-how for the dermatology and baby care portfolio.
With the sale of its flagship business, Shalaks Pharmaceuticals will have cash, current assets and the manufacturing facility worth nearly Rs 15 crore with the company. Invida Group financed the transaction from its internal cash reserves and the existing lines of credit. I-banking firm Singhi Advisors was the exclusive financial advisor to Shalaks Pharmaceuticals.
Shalaks clocked revenues of over Rs 36 crore in FY10-11 maintaining its EBIDTA margins in the 30 per cent range, pegging the enterprise/company valuation close to 2.8 times sales or 10 times EBIDTA multiple. Its product portfolio includes sunscreen lotions like UV Dew, Heximar ointment, Olemessa baby soap and massage oil besides skin creams like Glyaha and Boxtlak.
Invida Group is a three way venture between Quintiles, a pharmaceutical services organization, Singapore sovereign wealth fund Temasek Holdings and Zuellig Group, a pharmaceutical distribution and supply chain management network in Asia Pacific. Invida has over 3,500 employees across 13 markets with $200 million in revenues.
There have been several inbound deals in the Indian nutraceuticals market, which is seeing increasing interest from global majors. Of the global nutraceutical market of $117 billion Indian has less than 1 per cent share and is estimated to be around Rs 4,400 crore in size, according to a 2009 report by Ernst & Young.
Earlier this month, Aventis Pharma completed the acquisition of Universal Medicare Pvt Ltd’s marketing and distribution business of branded nutraceutical formulations in India for Rs 567 crore ($114 million).
Before that, French food products giant Danone said that it was acquiring the nutrition business of the Wockhardt Group for $355 million or Rs 1,580 crore to enter the Indian baby nutrition and medical nutrition market.
The pharmaceutical industry on the whole, has clocked 21 M&A deals with an announced value of $ 425 million since January 1 this year, as per data collated by VCCedge, the financial research platform of VCCircle. This was much lower than deals worth over $6 billion spread over 59 transactions announced in the pharma sector in the same period last year, but this number was inflated due to few big ticket deals including Abbott’s acquisition of Piramal Healthcare’s domestic formulations business and Fortis’ deal to acquire Singapore’s Parkway that eventually didn’t go through.