Wanbury buys Spanish co Cantabria for Rs 250 cr
Wanbury Ltd has got a toe-hold in the European market through the acquisition of Spain-based Cantabria Pharma for 42 million (Rs 250 crore). The consideration would go up to 50 million (about Rs 300 crore) and this would be linked to Cantabria Pharma achieving certain milestones in terms of profitability and product sales, said Wanbury’s Director Mr K. Chandran.
Cantabria Pharma is the branded generic drugs business of Industria Farmaceutica Cantabria and it is Wanbury’s first overseas acquisition. The company had acquired two domestic companies over the last two years — Doctor Organic Chemicals Ltd and Pharmaceutical Products of India — and expects to complete the domestic merger process by December or January, said Wanbury’s Director-Corporate Finance Mr Ashok Shinkar.
The overseas acquisition would bring into Wanbury’s fold Cantabria’s branded generic medicines that are sold ethically, that is, only through prescriptions, trademark rights, about 50 marketing authorisations and close to 100 sales, marketing and support personnel. The acquisition would be financed through internal accruals over three years and term loans, he said.
Targeted revenue
Cantabria Pharma targets 33 million in its first year. The company had clocked 27 million in 2005. It expects to have a consolidated revenue of Rs 400 crore in March 2008 and this would include the domestic and overseas buys, Mr Shinkar told Business Line. Wanbury, without the overseas buy, expects to close March 2007 at Rs 180 crore, he said.
Bulk drugs biz
Wanbury’s operations have a tilt towards bulk drugs, with 70 per cent of its current business coming from pharmaceutical ingredients that go to make medicines. But that balance gets upset for a year, with 55 per cent coming from finished dosage forms of medicines, he said, as a result of the overseas acquisition. However, on an average, bulk would contribute about 55 per cent of the business.
Manufacturing unit
The Cantabria Pharma acquisition does not bring with it a manufacturing facility and this has been outsourced in the past, said Mr Shinkar.
Mr Chandran said that the existing outsourcing arrangements would continue. However, the long-term plan is to manufacture new products in India, Mr Shinkar said. The company is looking to acquire a manufacturing plant to make finished dosage forms, he added.
Meanwhile, the company informed the Bombay Stock Exchange that it would seek shareholders’ approval for making investments of up to Rs 400 crore towards the acquisition. The board also approved borrowing 34 million to make an investment in Wanbury Holdings, a wholly owned subsidiary of the company and in Cantabria Pharma.
Wanbury shares were down 3.53 per cent on the BSE, at Rs 150.10
Source:
