Mumbai - Indian drugmaker Strides Arcolab Ltd has agreed to buy businesses in Australia and Mauritius from South Africa's Aspen Pharmacare Holdings Ltd, paying $300 million to expand its footprint in markets set for brisk growth.
For about A$380 million ($300 million), Strides is buying a generic drug operation in Australia that brought in sales of A$120 million in the year ended in June 2014, the firm said in a stock exchange filing on Thursday.
The deal also covers the sale by Aspen's Mauritius unit of a portfolio of six branded prescription drugs to Strides' Singapore business. Strides, a major manufacturer of soft gelatin capsules, said it will also gain access to Aspen's product pipeline that includes some “major product launches in the next six months”.
Australia's pharmaceutical market is expected to grow to $32.1 billion by 2020 from $22.7 billion in 2013, according to market research firm Global Data, driven by rising health insurance cover and an increasing elderly population.
Investors welcomed the news, sending Strides shares 5 percent higher in Mumbai at 07h34 GMT, while the broader market was down 0.17 percent.
In its own statement, Aspen said the deals were in line with its existing strategy “to focus attention in areas where most value can be added”.
The moves are the latest in a series by Strides to streamline its portfolio of assets. It bought Chennai, India-based drug ingredients maker Shasun Pharmaceuticals Ltd for $200 million last September, while in 2013 it sold its injectable drugs unit, Agila Specialties, to US firm Mylan NV for about $1.6 billion.
Strides owned Ascent Pharmahealth Ltd in Australia until 2012, when it sold the business to US firm Watson Pharmaceuticals, now called Actavis PLC. At the time, Strides said the deal was to sharpen its focus on high-margin, sterile injectable products.
Strides said the Australian business will operate under the Arrow Pharmaceuticals brand and will sell both prescription and non-prescription products, Strides said.
The deals will be financed using internal reserves and debt, Strides said, and should be immediately accretive to its earnings per share. The company said it expects the deals to close by the end of the second quarter.
Reuters