Pharmaceutical formulations manufacturer Vaishali Pharma Ltd, which went public in 2017, announced its first acquisition on Wednesday. The Mumbai-based company will buy Gujarat-based Kesar Pharma for Rs 20.41 crore.
Vaishali Pharma, which specializes in active pharmaceutical ingredients (APIs), formulations, surgical products, and nutraceuticals, will acquire a 51% majority stake in Kesar Pharma.
The deal is structured as a mix of cash and stock, with 40% paid in cash and the remainder settled through the issuance of fresh equity shares, the company said in a disclosure. The transaction is expected to be completed within a year.
Vaishali Pharma’s maiden acquisition will allow it to expand its product pipeline, enter new pharmaceutical categories, and leverage Kesar Pharma’s manufacturing facility and supply chain network, it said. “With this acquisition, we aim to maximize the utilization of its advanced manufacturing facilities. This strategic move will allow us to scale our operations, and enhance our global reach,” said Atul Vasani, chairman of Vaishali Pharma.
Abans Financial Services Ltd served as the financial advisor for the deal.
Founded in 1989, Vaishali Pharma offers APIs across various therapeutic categories, including anti-inflammatory, vitamin, antifungal, anti-diabetic, and veterinary products. The company operates over 250 brands in finished formulations and has an additional office in Vietnam.
For the year ended March 2024, Vaishali Pharma’s net sales rose to Rs 86.2 crore from Rs 69.6 crore the previous year. However, its net profit fell sharply to Rs 0.7 crore from Rs 6.6 crore.
Founded in 2011, Kesar Pharma specializes in contract manufacturing and private-label production of pharmaceutical formulations, including tablets, syrups, and ointments.
The company has been facing financial headwinds for the past two years. Its net sales in FY24 stood at Rs 27.06 crore, nearly the same as in FY19. In FY23, its revenue had dropped significantly to Rs 25 crore from Rs 48.9 crore in FY22. Net profit also declined to Rs 0.4 crore from Rs 2 crore during the same period.
