Ahmedabad-based Torrent Pharmaceuticals Limited has entered into a an agreement with Elder Pharmaceuticals Limited to acquire its branded domestic and formulations business in India and Nepal for about Rs 2,004 crore.
Torrent Pharmaceuticals Ltd would fund the acquisition value through a mix of internal accruals and bank debt, stated a release here on Friday. The transaction will also involve the transfer of employees engaged in sales, marketing and operations of Elder's business in India and Nepal.
Under the proposed transaction, Elder Pharmaceuticals will continue to manufacture & supply the products at its existing manufacturing facilities for Torrent for a period of three years.
“The transaction is a strategic fit for Torrent and will strengthen its core prescription-based business. This acquisition strengthens our position in the Women Healthcare, Pain management & Vitamins/Nutrition segments by enhancing and accelerating market access. It is also expected to enable cost and revenue synergies in Torrent’s domestic formulations business” said Mr. Sudhir Mehta, Chairman, Torrent Group.
“This path breaking domestic consolidation by Torrent addresses our recent challenges and will significantly help Elder de-leverage its balance sheet. We will now focus and grow our in-licensing, anti-infectives and exports business” said Alok Saxena, Managing Director and CEO, Elder.
The transaction has been approved by the Boards of Directors of both companies. The transaction is subject to customary conditions precedent including shareholder approval and applicable regulatory approvals and is expected to close in the first half of 2014.