Adcock Ingram Healthcare Private Limited‚ a wholly owned subsidiary of the Adcock Ingram Group (AIP) registered in India‚ has reached agreement to acquire certain assets of Cosme Farma Laboratories Limited‚ a pan-Indian pharmaceutical company based in Goa‚ India.
The purchase price is INR4.8bn (Indian Rupees) or about R708m. With VAT of INR240m (R35m) and stamp duty of INR240m (R35m)‚ the total is R778m.
Cosme is a division of the Cosme Group‚ a diversified‚ family-owned business‚ headed by Cosme Menezes‚ a prominent figure in the pharmaceutical market in India.
The Cosme division has been operating in the Indian domestic pharmaceutical market for the past 40 years.
The purchase price will be settled in cash with an initial upfront payment of 90% and the remaining 10% withheld for six months in an escrow account‚ as security for possible breaches of warranties‚ Adcock Ingram said on Tuesday.
The effective date of the transaction is expected to be no later than October 31 2012.
Cosme is a mid-sized sales and marketing pharmaceutical business with offices and operations in Goa and Mumbai. It is ranked 55th out of the approximately 5‚000 registered pharmaceutical companies in India‚ per IMS Health.
It has a sales force of about 1‚000 staff providing nationwide coverage to about 150‚000 physicians.
Cosme has distribution capabilities in 27 states in India and has a portfolio of products in several therapeutic classes‚ key being gynaecology‚ gastrointestinal‚ dermatology and orthopaedic.
Adcock said India was a leader and key participant in the global pharmaceutical market‚ providing global and local pharmaceutical companies with manufacturing‚ regulatory‚ research and development capabilities.
India is an attractive investment destination for Adcock Ingram. In 2007 Adcock Ingram formally entered the Indian market through a manufacturing joint venture with an Indian pharmaceutical company.
In July 2011 Adcock Ingram opened a regulatory and administrative support office in Bangalore to provide back-office support to its African operations and‚ importantly‚ to facilitate the establishment of a domestic pharmaceutical business.
The acquisition provides Adcock Ingram with access to the high-growth Indian pharmaceutical market with current spending on pharmaceuticals of around US$16bn.
The deal is subject to conditions including regulatory approvals in both India and SA‚ such as by the South African Reserve Bank‚ the Indian Foreign Investment Promotion Board and the Competition Commission of India. - I-Net Bridge