Vivimed sells part of specialty chemical unit for $57.7M

Drugmaker Vivimed Labs Ltd said on Wednesday it has agreed to sell some of its specialty chemical products to Clariant Chemicals India Ltd, a unit of Switzerland's Clariant AG, for Rs 380 crore (around $57.7 million).

The products being sold accounted for 10 per cent of the company’s consolidated revenue of about Rs 1,400 crore in 2014-15, Hyderabad-based Vivimed said in a stock exchange filing.

The deal is subject to regulatory, statutory and shareholders' approval.

Vivimed will use a major portion of the proceeds from the deal to reduce debt. It is also focusing on growing its bulk drugs and finished drugs businesses in regulated markets.

“This transaction will help us significantly improve financial flexibility for future growth," said Santosh Varalwar, MD and CEO of Vivimed.

Saurabh SG, director-strategy at the company, said the specialty chemicals products that the company is retaining will be a differentiated offering in the marketplace with a focus on niche segments.

The acquisition will help Clariant India to expand its product portfolio within the sun, skin, hair and oral care range as well as offer anti-microbial preservatives. “This marks an important step of our global strategy to enhance our offering in personal care and to boost our presence in Asia,” said Stephen Lynen, head of the industrial and consumer specialities business for Asia Pacific at Clariant.

Vivimed, founded in 1988, offers a wide range of specialty chemicals and pharmaceutical products. Its specialty chemical business posted revenue of Rs 446.2 crore for the year ended March 31, 2015, or a third of the company's turnover. This unit recorded revenue growth of more than 7 per cent last year even as the pharmaceutical business saw revenue slipping 0.3 per cent.

The company is backed by NYLIM Jacob Ballas India and Kitara Capital. The two PE firms had together invested Rs 127 crore in Vivimed Labs in 2011. Jacob Ballas holds a 13.13 per cent stake in the company while Kitara has 11.29 per cent. Last year, Mumbai-based Kitara increased its holding in the drugmaker.

In 2013, Vivimed acquired Hyderabad-based Finoso Pharma Pvt Ltd in a cash-cum-stock deal worth Rs 15 crore. The same year, it also struck a deal to acquire the solid oral dosage manufacturing facility owned by the US drug-maker Watson Pharmaceuticals Inc.

On Wednesday, shares of Vivimed jumped 4.36 per cent to Rs 342.00 in early trade on the BSE in a strong Mumbai market.

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