Aurobindo Pharma on Saturday said it will buy generic drug operations in seven western European companies from Dublin-based Actavis Plc for about 30 million euros, or Rs 249.81 crore as per the current exchange rate.
The Hyderabad-based company will buy personnel, commercial infrastructure, products, marketing authorisations and dossier licence rights related to Actavis? operations in France, Italy, Spain, Portugal, Germany, Netherlands and Belgium. The deal will add about 1,200 finished products and an extra pipeline of over 200 products to Aurobindo?s portfolio.
Aurobindo said the acquired businesses are currently loss-making; however, it plans to return them to profitability. It estimated the net sales for the acquired businesses would be around 320 million euros in 2013 with a growth rate of over 10% year-on-year.
The company?s sales from Europe constituted about 6% of its total revenue in FY13. It recorded FY13 European sales of R329.11 crore. Its total revenue for FY13 was R5,451.61 crore.
The company posted Q2FY14 net profit of R234.95 crore on sales of R1,897.48 crore. Aurobindo will also be entering into a long-term supply agreement with Actavis in order to support the ongoing growth plans of these businesses.
Aurobindo said it will fund the transaction through internal accruals. The company had cash and cash equivalents balance of R306.01 crore as on September 30, 2013.
?We have carefully reviewed the Actavis European operations and concluded that with our cost competitiveness and group structure, we could significantly capitalise Actavis? market position in these western European countries and improve profitability, thereby accelerating our strategy of becoming a significant player in Europe,? said Aurobindo?s CEO of formulations business, Arvind Vasudeva.
