Marksans Pharmaceutical Limited, one of India’s leading mid-size vertically integrated pharmaceutical company, today, announced the acquisition of Relonchem Limited, a leading UK based generic pharmaceutical company for an undisclosed sum. Relonchem Limited has clocked sales of US $ 32 million (approx.) and adjusted EBITDA of US $ 5 million (approx.) in the FY 2007.

The recent acquisition will give Marksans Pharma an immediate sales and marketing front-end access to the highly regulated and lucrative generic medicines market in UK and Europe. The Company expects to derive significant cost benefits by transferring Relonchem Limited’s manufacturing operations to its state-of-the-art India manufacturing facilities.

Management Comments:

Commenting on the latest acquisition, Mark Saldanha, Managing Director, Marksans Pharma said, “The acquisition gives us an immediate and deep marketing, distribution and sales presence in the highly profitable but regulated generic markets of UK and Europe. Relonchem is a profitable company with significant product licenses, demonstrated success in procurement of product dossiers, distribution and sale of pharmaceuticals. With its profitable operations and immense market opportunity, this acquisition will be profitable from the beginning, adding value to all our stakeholders. This is our second acquisition in Europe after Bell’s & Sons and is a significant milestone which will become one of the key drivers to Marksans’ global growth strategy.”

Commenting on becoming a part of Marksans Pharma, John Ruprai, CEO, RelonChem Limited said, “All of us at RelonChem are excited to become a part of Marksans Pharma; we will together carry forward our market leadership in generic manufacturing in UK and Europe. A value added Indian manufacturing base of the company will give us tremendous cost benefits and create value among our customers locally. It is a strategic fit and we hope to serve our customers in a more efficient way in an ever increasing competitive market, thus adding value to the patient care system in UK and Europe.”

Rajesh Vig, Executive Director, Corporate Finance, PricewaterhouseCoopers Ltd., India, said, “The acquisition of Relonchem by Marksans Pharma is another example of a strategic cross border M&As by mid-size Indian Pharmaceutical companies. With global pharmaceutical companies facing tremendous pressure due to a drying R&D drug pipeline, rising costs and imminent generic competition from drugs going off patent, the generic drug market is the next big opportunity for the industry. This acquisition will create value in front-end sales and marketing reach and backend manufacturing efficiency for Marksans while providing Relonchem with an ideal partner for future growth.”

Cost of acquisition:

The acquisition is on a debt free, cash free basis. The purchase price for transaction has not been disclosed. Relonchem currently has profitable operations with high growth outlook and will add to Marksans’ earnings from the date of acquisition. In the FY 2008, Relonchem had a top line of US $ 32 million (approx.) and adjusted EBITDA of US $ 5 million (approx.). Marksans plans to use a combination of cash-in-hand and debt to fund the acquisition. The transaction is subject to the customary closing conditions and necessary regulatory approvals.

Strategic fit and business rationale:

The acquisition of Relonchem, a well-established generics pharmaceutical company in UK is an excellent strategic fit for Marksans Pharma, as it gives access to the Company to the highly regulated but high growth, generic UK and European markets immediately.

Relonchem is a leading pharmaceutical marketing and distribution provider with strong sales and marketing expertise; it is a supplier to major national distributors, regional distributors and global generic players in UK. It has very good technical and regulatory expertise with a highly reputable track record for attaining MHRA approval for the products, complex technical transfers and registration of new developments in Europe. It has commercial experience of molecule lifecycle management and ability to replicate its market share successes and expansion into Europe. Its people resources boasts of an excellent team, fully integrated with the Indian pharmaceutical market, optimising its management skills to source competitive services for the regulated markets of Europe.

The company has a strong product portfolio and has granted 47 product licenses with 36 licenses pending in UK, Denmark, Finland and Ireland; 36 products are commercialized as of now. Its products cater to wide range of therapeutic segments like anti-infective, anti-depepressant, antibacterial, antifungal, cardio-vascular, diuretics, anti-diabetes, anti-ulcer, analgesics and sex hormones. It has a robust pipeline for new product development and the company has identified a range of developments in the narcotic and dermatological segment.

Marksans Pharma’s India manufacturing facilities will become a production base for the drugs being sold in UK and Europe. Also, for new product development, the Company’s Contract Research and Manufacturing Services (CRAMS) capabilities in India will help in quickening the process at significantly lower costs.

Tags: calls, daytrading, free calls, intraday, tips

Similar Posts:

• Dr. Reddy’s acquires Jet Generici Srl
• Sun Pharma acquires US-based Chattem Chemicals
• Dabur India acquires 72.15% of Fem Care Pharma
• Sun Pharma sales up 66%, profit up 121%
• Sun Pharma Q4 sales growth 129%, Profit increased 225%