Advanced Enzyme Technologies Ltd, a publicly listed research and healthcare company, is picking up a majority stake in a contract manufacturer that focusses on speciality products in certain sectors.
The company is subscribing to a little over 5.2 lakh shares in SciTech Specialities Pvt. Ltd (SSPL) in an all-cash deal for around Rs 31.62 crore ($4.29 million at current exchange rates).
Advanced Enzyme will acquire 4.92 lakh shares on a private placement basis and nearly 28,000 shares from certain shareholders. This will represent 51% of the paid-up share capital of SSPL.
Advanced Enzyme expects the acquisition to close by the end of January.
The acquisition will help Advanced Enzyme leverage synergies with SSPL and expand its business-to-consumer segments. It will also provide Advanced Enzyme with important applications in three of its existing verticals – human health, animal nutrition and food – while providing new delivery systems for existing products.
SSPL will use the proceeds from the share allotment to expand its capacity, invest in quality control and research development, and repay debt.
Incorporated in 2007, SSPL specialises in manufacturing effervescent granules and tablets using aqueous granulation technology. The company operates two manufacturing facilities for nutraceuticals and pharmaceuticals, and exports products to several countries including France, Peru, Honduras, Ecuador, Vietnam, Thailand and Turkey.
SSPL reported sales of Rs 26.68 crore for 2019-20 and a post-tax profit of Rs 1.07 crore.
Thane-based Advanced Enzyme reported consolidated net sales of Rs 443.98 crore for 2019-20 and a net profit of Rs 133.04 crore. Its shares were trading 1.8% up at Rs 330.95 apiece on Monday morning in a positive Mumbai market.
Advanced Enzyme has received the backing of private equity investors and healthcare-focussed investors including OrbiMed. In September, VCCircle reported that the company had received an infusion of capital from the India-focussed Nalanda Capital.