Bangalore-based Strides Shasun Ltd said its board has approved the divestment of its contract research and manufacturing services (CRAMS) and active pharmaceutical ingredient (API) unit Shasun Pharma Solutions Ltd, UK, for an enterprise value of £25 million (Rs 240 crore).
Following the divestment, Shasun Pharma Solutions is proposed to be acquired by its current management team with funding from the promoters of Strides Shasun, it said in a filing to the stock exchanges.
The erstwhile Shasun Pharmaceuticals—which was merged with Strides Arcolab in 2014—had acquired UK-based pharma firm Rhodia Pharma Solutions in 2006 and renamed it as Shasun Pharma Solutions.
In FY2015-16, Shasun Pharma Solutions recorded an EBITDA of £3.94 million (Rs 37.8 crore) with revenues of £33.27 million (Rs 319 crore).
Shasun Pharma Solutions suffered a major setback in 2011 due to the failure of a key customer product in the market and the business could not sustain profitability for several years, Strides Shasun said. However, Shasun Pharma Solutions, under its new management, shifted focus from being a pure CRAMS player to becoming a multiple industry CRAMS firm since 2014. This has helped the business reach stability, it said.
The divestment is expected to be completed in the July-September quarter of FY2016-17, it added.
Meanwhile, Strides Shasun reported a consolidated net profit of Rs 96.22 crore for the quarter ended March 31, 2016, against Rs 11.4 crore in the same period last year.
Strides Shasun makes tablets, hard- and soft-gelatin capsules, sachets and semi-solids, among others. It has 12 manufacturing facilities across three continents. The company had raised about Rs 1,102 crore by selling shares to institutions in December.
Shares of Strides Shasun ended at Rs 1192.55 apiece on the Bombay Stock Exchange, up 0.24% in a flat Mumbai market.
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