Chandigarh-based Surya Pharmaceuticals, a mid-sized pharma player with FY10 net revenue of Rs 1,144 crore, has acquired US-based over-the-counter (OTC) analgesic drug brand ActivOn, used to treat aches and pains, along with its global marketing rights for $22 million (a little above Rs 99 crore). Surya Pharma claims to be one of the largest manufacturers and exporters of mint/menthol derivatives.
The ActivOn brand comes to Surya's kitty with the acquisition of Ameshire Investment Corp through its wholly owned subsidiary Surya Pharmaceutical (Singapore) Pte Ltd.
The company will fund the acquisition through a mix of internal accruals and debt financing from EXIM Bank, it said in a filing to the BSE.
ActivOn is used to provide relief from joint and muscle pain associated with arthritis, backache, strains, bruises and sprains. Through this acquisition, the company has also added to its portfolio brands namely, Preferon, Firston and Renewin which will give it an added edge in the US markets. The company would also get global marketing rights (except US) for Headon, another leading brand.
"This acquisition will not only entitle us to ready shelf space with leading retailers like Walmart, Walgreen, CVS and RiteAid but also would be instrumental in establishing our presence in the U.S. markets. Our presence in the coming years would offer attractive opportunity to launch our OTC/FMCG products, using ActivOn's distribution set-up," said Hariom Bhatla, CEO of Surya Pharma.
Expanding on the deal, Mr Bhatia told VCCircle, "This (ActivOn) is a highly profitable business in the US. This will give us an edge to set up our own OTC business in that country. We bought the brand ActiveOn along with the marketing company. There is no manufacturing facility. All manufacturing is outsourced." He said, "by 2011-12, we expect $18-20 million to be added to the topline. It (ActivOn) is one among the top five companies in the US in this sector."
The company had announced its plan to raise Rs 300 crore through GDR and FCCBs to look at a few acquisition possibilities within India and overseas and to fund another greenfield project.
The company is setting up new API manufacturing unit near Chandigarh at an investment of over Rs 500 crore. The proposed unit will manufacture the entire range of APIs including cardio-vascular products, CNS products, hormonal products and steroids.
The group owns Pharmaceutical retail chain ‘Viva’ which has presence in Punjab, Chandigarh, Delhi and has set up a new facility at Samba in Jammu & Kashmir to manufacture APIs and formulations at Rs 320 crores.
The company has also Contract Research and Manufacturing Services (CRAMS) facility near Banuar in Punjab.
The shares of the company are traded at Rs 30.20 at BSE, 4.4% above the previous closing.