Ahmedabad-based drugmaker Torrent Pharmaceuticals Ltd has agreed to acquire the branded formulations business of Unichem Laboratories Ltd in India and Nepal for Rs 3,600 crore ($558 million), the companies said on Friday.
This is Torrent’s fifth acquisition in the country within four years and will propel it into the list of India’s top five pharmaceutical companies in terms of revenue market share, it said in a stock-exchange filing.
The deal involves Torrent, which has annual revenue of Rs 5,800 crore, acquiring around 120 brands in India and Nepal and a manufacturing plant in Sikkim from Unichem. About 3,000 Unichem employees will also join Torrent.
“The transaction is a strategic fit for Torrent and will strengthen its position in cardiology, gastero-intestinals and CNS (central nervous system) therapies,” Torrent chairman Sameer Mehta said.
Unichem will retain its international business and six factories that make formulations and bulk drugs. Unichem chairman Prakash Mody said this deal will help the company focus on research for new chemical and biological entities.
Unichem reported revenue of around Rs 1,413 crore for the financial year ended in March. The domestic formulations business accounted for nearly 60% of this revenue, or Rs 841.5 crore, the company said.
Torrent said it will fund this deal through a mixture of internal accruals and bank borrowings. The deal is subject to customary regulatory approvals, including from Unichem shareholders, and is likely to close by the end of this year.
The company also said it is gaining one brand with sales of Rs 200 crore and three brands with sales of Rs 50 crore each. The brands it is acquiring include Losar, Unienzyme, Ampoxin, Telsar and Viztlac.
This deal will also mark Torrent’s entry into the over-the-counter space with Unienzyme. Torrent also expects to improve its position in segments like digestive enzyme, anti-depressants, anti-hypertension and tranquilizers.
The Unichem deal is Torrent’s biggest acquisition. Its previous biggest deal was the purchase of Elder Pharma Ltd’s domestic formulations business in 2014 for Rs 2,004 crore.
Its most recent acquisition was in March when it bought a portfolio of brands from Novartis India.
In June 2016, it had bought an active pharmaceutical ingredient facility of Hyderabad-based Glochem Industries Ltd for an undisclosed amount. In 2015, it had acquired the dermatological operations of Zyg Pharma.
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