In one of the largest overseas acquisitions by an Indian pharmaceutical company, all in cash deal, the Ahmedabad-based Intas Pharmaceuticals - which is among the top 10 Indian pharmaceutical companies by revenue - has acquired the global generics giant Teva assets for £600 million (Rs 5,100 crore). In a big leap for an unlisted Indian company, the Intas Pharmaceuticals has acquired the generics business of Actavis in the UK and Ireland.
Annual revenue of Rs 6.569 Cr
The Ahmedabad-based Intas Pharmaceuticals had annual revenue of Rs 6,569 crore, which is an earnings before tax, depreciation, interest, and amortisation (Ebitda) margin of 22 per cent and the net profit of Rs 882.5 crore in 2015-16. Through the deal, the pharmaceutical company has obtained certain rights over Combino's hospital portfolio in a few non-European and European countries.
Intas pays 2.4 times Teva UK’s revenue
Following the European Commission's (EU) anti-trust divesture requirements arising from its acquisition of Actavis Generics, Teva sold these assets. In 2015, the total revenue of Teva's Ireland and UK business was around £250 million (Rs 2,100 crore) and Intas paid 2.4 times Teva UK's revenue for the acquisition.
Strong platform for further European expansion
"This transaction represents a unique opportunity for Intas to build scale in the UK and in Ireland. It will add to our market-leading hospital franchise and create a strong platform for further European expansion," said Binish Chudgar, vice-chairman and managing director of Intas. The company, which is family owned has private equity investment from Chrys Capital (six per cent) and Temasek (10 per cent). The debt-equity ratio of Intas Pharmaceuticals was at 0.28 times in Financial Year 2015.
60% Revenue from exports to 70 countries
Intas has focus on super-speciality in nephrology, urology, orthopaedics, gastroenterology, central nervous system and cardiology-diabetics segments. A total of sixty per cent of the company's revenue comes from exports to 70 countries, and four-fifth of it is from the UK, the US and the EU. The drug company had, in 2015, acquired Spain's Corporacion Combino Pharm's hospital supply business, which was for an undisclosed amount.
Clear plan for continuation and development
"Through our subsidiary, 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. We have a clear plan for the continuation and development of the Barnstaple site and the Actavis UK and Ireland team; we look forward to welcoming them to the Intas Group. We are confident that the cultural alignment between Accord and Actavis UK & Ireland will ensure a smooth integration," said Chudgar.
Great opportunity to build on the strong foundation
"Together we have a great opportunity to build on the strong foundations of our respective organisations; we are excited to join the Intas/Accord family and look forward to an exciting future together," said Sara Vincent, senior vice-president, Actavis UK and Ireland.