Pharmaceutical company Unichem Laboratories said in a statement it has acquired 19.99% each in two bulk drug companies of Hyderabad-based pharmaceutical group Optimus for a total of Rs 120 crore ($16.5 million).
As part of the transaction, the firm bought stake in Optimus Drugs Pvt. Ltd for Rs 72.08 crore and acquired holding in Optrix Laboratories Pvt. Ltd for Rs 47.92 crore, Unichem said in a stock market disclosure.
The acquisition will give Unichem access to the active pharmaceutical ingredient (API) facilities of the two companies in Hyderabad and Visakhapatnam. The deal will also provide the acquirer with additional capacity to fulfil its export orders.
Optimus, founded by D Srinivas Reddy in 2004, had a total income of Rs 198.86 crore for the financial year ended March 2018, said the stock market disclosure. Optrix, which was set up in March 2012, reported a total income of Rs 173.38 crore for the financial year ended March 2018, said the disclosure.
Both the companies, owned and controlled by the same management, are engaged in researching, developing, manufacturing, marketing, and distribution of APIs and intermediates.
Trans-Continental Capital Advisors Pvt. Ltd and Genesis Management Consultancy Services Pvt. Ltd acted as financial advisers to the transaction.
Unichem
The company, founded in 1944 by the late Amrut Mody, is known for its speciality pharmaceuticals business. The drug maker has more than 500 regulatory filings for APIs.
In its latest annual report, Unichem said that it intends to ramp up its capabilities and capacities in APIs and intermediates manufacturing to serve its fast-growing US formulations business.
“The opportunities in the API space are growing, with branded drug sales coming off patent and an increasing number of successful patent challenges made by generic companies,” it added.
Unichem reported total revenue of Rs 879.4 crore for the financial year ended March 2018, up from Rs 704.17 crore a year earlier, going by the company's filings to a stock exchange.
Deals in the space
The API sector has seen some activity in the past few months.
Last month, Dr Reddy's Laboratories Ltd entered into a definitive agreement to sell its API plant in Hyderabad to Indian generics pharma company Therapiva Pvt. Ltd
In August, Glenmark, backed by Singapore state investment firm Temasek, decided to hive off its API business into a wholly-owned subsidiary, Glenmark Life Sciences. Glenmark’s API unit clocked revenue of Rs 877.9 crore for the year ended March 2018, going by media reports. Previously, reports had said, citing unidentified people, that private equity firm True North was set to buy a stake in Glenmark's API business.
In February, SMS Lifesciences India Ltd said it would acquire Mahi Drugs Pvt. Ltd, which makes APIs and more.