The Rs 2,800-crore Aurobindo Pharma Ltd (APL) will buy out its group company — Trident Life Sciences Ltd (TLSL), a clinical research organisation (CRO) – for about Rs 135 crore.
The board of directors of the Hyderabad-based APL, which is into API (active pharmaceutical ingredients), formulations and development of new chemical entities, has approved a proposal to acquire 100 per cent stake in TLSL.
The acquisition is expected to expand Aurobindo’s business space into injectables. TLSL is currently setting up a dedicated facility spread over 30 acres to manufacture liquid injectables at Medak near here.
KPMG India Private Ltd, Motilal Oswal Investment Advisors Pvt Ltd and R B Shah Associates, appointed by APL, valued TLSL at Rs 134.9 crore, Aurobindo informed the BSE today. The equity value of TLSL as on June 30, 2009 was pegged at Rs 38.8 crore while the debt was at Rs 96.1 crore. The total cash outflow for the proposed acquisition would be Rs 38.8 crore for APL.
“The idea behind exiting from injectables segment is to facilitate increased focus on clinical research business which is doing well. Injectables business consumes a lot of energy on regulatory and marketing fronts,” Mr G.V. Seshaiah, Chief Financial Officer, TLSL told Business Line.
TLSL had done a business of Rs 50 crore in clinical research and is expecting Rs 60 crore turnover this year, he added. The TLSL plant is expected to manufacture general injectable range of formulation products, including glass vials for lyophilised sterile powder and liquids. Currently, 75 per cent of the facility is complete and the plant is scheduled to commence operations in April 2011.
TLSL was incorporated in 2004 as a CRO. However, its management later demerged the CRO business into a separate company. Post-demerger, it is left with the injectable business.
The Aurobindo scrip slid 2.68 per cent on the BSE to end at Rs 645.30 on Monday.
Source: The Hindu Businessline