MUMBAI: Closely held Ahmedabad drugmaker Intas Pharmaceuticals has trumped larger domestic peer Aurobindo PharmaBSE 2.13 % and Cinven, a London-headquartered private equity firm to acquire assets of Teva Pharmaceuticals in UK and Ireland for an enterprise value of around $764 million (Rs 5085 crore). The deal ends a much-watched bidding war for the sale of assets that include a long list of products and a manufacturing site.
A formal announcement was made late on Wednesday evening. ET broke the story earlier on Wednesday afternoon in its online edition.
Teva’s divestiture process is mandated by UK’s antitrust authority as part of the $40.5 billion acquisition that the Israeli pharma behemoth signed last year with Allergan for its generics business.
With the acquisition of Teva’s products, sold through erstwhile Actavis’ operations, Intas is set to emerge as a top player in the UK generics market. The deal will further bolster its reach in hospital-based products and add at least one more manufacturing capability to its existing three plants in the UK. The latest deal with Teva is expected to double Intas’ European sales to over $500 million. Sales of Teva’s UK and Ireland business stood at roughly $325 million during 2015.
“We like to be consistent, work on plans and our strategies play over a longer time,” Binish Chudgar, Vice Chairman, Intas Pharmaceuticals told ET, from Barcelona, referring to the expansion drive in Europe. He said the deal is an important step for Intas, which has been present in Europe for a long time. “This transaction represents a unique opportunity for Intas to build scale in the UK & Ireland – adding to our market leading hospital franchise – and creates a strong platform for further European expansion” he added.
LOW KEY TRAILBLAZER
Chudgar oversees the international marketing strategies for Intas while his brothers Nimish leads the operations and Urmish is an oncologist and does not have a direct involvement in the organisation. He generally helps identify and guide the company fill the need gaps for the patients. Intas was founded by their father Hasmukh Chudgar, who at 77 is now the chairman of the group.
Actavis UK & Ireland is one of the leading suppliers of generic pharmaceuticals in both the UK and Irish markets with selected assets and operations across the respective markets. The company focuses on providing high-quality generic products to both pharmacies and wholesalers in the UK & Ireland through its strong employee base of over 600 staff. Actavis UK & Ireland is supported by a strong manufacturing presence in the UK through its Barnstaple site, which provides services both to Actavis UK and Ireland and other third parties.
Intas will be using its European subsidiary Accord Healthcare as the vehicle for this acquisition. Last year Intas, which is 85% owned by the Chudgar family and has an equity holding from Temasek and ChrysCapital, acquired the hospital products business of Spain’s Corporacion Combino Pharm SL through Accord Healthcare.
“We have been operating successfully in Europe for more than a decade and this acquisition will make Accord a leading generics player in the UK market,” said Chudgar.
Accord recently also made a significant investment to reinstate a facility closed by closed by Sanofi-Aventis in Newcastle. The Barnstaple plant will become the company’s 4th UK site, ensuring Accord has one of the most extensive supply chains to service pharmacies, hospitals and wholesalers across UK and Ireland and also into Europe. Sources said Accord is likely to continue manufacturing at Barnstaple for at least the next 5 years.
The transaction is subject to regulatory approval, which is expected to be provided in Q4 2016, will complete thereafter.
ET in its August 29th edition was the first to report Intas and AurobindoBSE 2.13 % submitted binding bids for Teva’s UK and Ireland operations.
Moelis & Company and Rothschild & Co are the financial advisors and Linklaters LLP are the legal advisor to Accord. Intas is being financed by a consortium of foreign and domestic lenders led by Japan’s Bank of Tokyo-Mitsubishi UFJ. Other banks in the consortium include Axis, ICICI, Kotak, and Citi.
The preliminary bids for Teva’s UK and Irish assets had top names such as Sandoz and Mylan as well private equity players like Apollo Global Management.
In the US, Teva has already agreed to sell some assets in order to get global antitrust approval. In June, it pledged to divest a basket of generic drugs to Australia’s Mayne Pharma Group Ltd. for $652 million. During the same month, Impax Laboratories Inc. and Dr. Reddy’s LaboratoriesBSE -0.42 % Ltd. both announced deals to buy some other generic products from the two companies. Teva sold over 70 products in piecemeal transactions that had also included drug makers like ZydusBSE 0.20 % Cadila, Aurobindo, and CiplaBSE -0.39 %.
Ranked among the top ten companies in Indian, with its total sales exceeding a billion dollar, Intas has maintained a remarkably low key. In the domestic market, it clocked sales of around Rs 3000 crore with a strong push in the specialty focused businesses in chronic care segments like neurology, cardiology, and metabolic diseases. Intas has, in particular, made an aggressive pitch in the emerging biosimilars segment, securing as many as six approvals in the local market and at least one from the European authorities for filgrastim, a chemotherapy drug. Over half of Intas’ revenues are generated from overseas markets.
As Intas walked away with the deal, Aurobindo, which was seen as the top contender for Teva’s assets, is expected to set its sights on a few other potential targets to grow its European market.
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