Hyderabad-based Vivimed Labs Ltd has acquired Uquifa, a manufacturer of pharma APIs and intermediates with operations in Spain and Mexico, for $55 million or Rs 284 crore, the company has said in a statement.
The deal has been financed by a balanced mix of debt and equity funds. The investment is paid by equity infusion of $20 million (Rs 103 crore), debt financing of $25 million (Rs 129 crore) and the rest $10 million (Rs 51.7 crore) by way of deferred payment, a company statement said.
In September this year, Vivimed acquired 60 per cent stake in Octtantis Nobel Labs Pvt Ltd, which is engaged in trading, manufacturing and marketing of pharmaceutical and nutraceutical formulations conforming to the GMP Standards of World Health Organization. During this period, Vivimed also raised Rs 127 crore ($27.6 million) from private equity firms NYLIM Jacob Ballas Fund III and Kitara Capital.
Under the current deal, Uquifa gets the supply side efficiencies and knowledge base of Vivimed while Vivimed would leverage the pre-eminent position of Uquifa in APIs & intermediates, and also its robust pipeline of filings to accelerate growth across Europe and the Americas in the next five years.
“In a move to bring in strategic growth into its product mix and expand the footprint in Europe and the Americas, Vivimed Labs has taken a measured stride with the acquisition of Uquifa Spain and Uquifa Mexico,” the company stated.
At 1 pm, shares of Vivimed Labs were trading at Rs 244.85 per unit on the BSE, up 1.62 per cent from the previous close.
Uquifa is the pharmaceutical division of UK-based Yule Catto Plc. and operates three manufacturing units – two in Spain and one in Mexico. The pharma company sells its products to more than 70 countries and has more than 150 active DMFs filed and 20 COS approved. Uquifa has net assets of $65 million and gross assets of $100 million as of June 2011.
Vivimed is engaged in the specialty chemicals and pharmaceuticals businesses in India. The company’s specialty chemicals segment provides active ingredients to manufacturers of beauty care products, industrial care products and photographic chemicals for photo imaging technology. The company also does contract manufacturing and job works for various pharma products.
Commenting on Uquifa acquisition, Vivimed Labs MD Santosh Varalwar said, “Multi-geographical locations spell stability and cement long-term relationships with customers and channel partners. With Uquifa, Vivimed will have a footprint into LATAM and deeper into Europe.”
Post-acquisition, Varalwar will be the president of Uquifa while Mark I Robbins will remain the chief executive. Sandeep Varalwar, head of the pharmaceutical division of Vivimed Labs will also join the board of Uquifa.
Although there had been no large M&A deal in the pharma space in the past one year, there had been a string of small and mid-size transactions – both inbound and outbound.
In November this year, Mumbai-based Lupin Ltd acquired up to 100 per cent stake in Tokyo’s I’rom Pharmaceutical Co Ltd, an integrated Japanese healthcare provider, for an undisclosed sum. Also, 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).
On the whole, the pharmaceutical industry has clocked 21 M&A deals, with an announced value of $425 million since January this year, according to data collated by the VCCedge, the financial research platform of VCCircle. However, this is much lower than the deals worth over $6 billion, spread over 59 transactions announced in the pharma sector in the same period last year. On the other hand, last year’s deal size was bigger due to a few big-ticket deals including Abbott’s acquisition of Piramal Healthcare’s domestic formulations business.