Eris Lifesciences on Thursday announced the acquisition of Biocon Biologics’ India branded formulation business for Rs. 1,242 crore.
Eris has also signed a 10-year supply agreement with Biocon Biologics as a part of this deal.
As part of the deal over 430 employees associated with the business are expected to transition to Eris, ensuring continuity for both employees and patients.
Biocon Biologics’ India branded formulation business has revenue of Rs 360 crore, which represents a valuation of 3.4x of revenues.
Of the Rs 360 crore, two products Basalog and Insugen contribute Rs 100 crore each. Oncology and critical care portfolios contribute 80 crore each. The oncology portfolio includes novel biologic drug nimotuzumab, and biosimilars of trastuzumab and bevacizumab.
The transaction is expected to come into effect before April 15, 2024, subject to customary closing conditions.
The deal will be funded by Eris through debt financing.
This acquisition also provides immediate synergies with Eris’s last month acquisition of Swiss Parenterals business. The Biocon product range can be quickly scaled up by leveraging the product portfolio of Swiss, which consists of over 240 unique molecules.
The combination of the two deals also provides margin expansion opportunities through insourcing/ technology transfer of manufacturing to Swiss’ facilities.
“This deal, combined with the acquisition of Swiss Parenterals that we announced last month will turbocharge our entry into the Rs 30,000 crore India branded injectables market and pave the way for our next Rs 1,000 crore vertical in the next 3-4 years,” said Amit Bakshi, chairman and managing director of Eris.
“Over the last two years we have added a number of strategic growth engines to our portfolio and now we have all the building blocks in place to be able to achieve our target of Rs. 5,000 crore revenue over the next 3-4 years,” Bakshi added.
Following the deal Eris debt on the balance sheet will rise to Rs 3000 crore.
“We are in a comfortable position to service the interest, and even start making principal repayment from next year onwards.. our cash flows have been very strong, 75% of EBITDA converts into cash flow,” said V Krishnakumar, COO of Eris.
For Biocon Biologics, the deal will help in reducing debt further, which it has taken to fund the acquisition of Viatris’ biosimilar business.
