Friday, March 5, 2010

Stride Arco is moving 327 today...

Strides buys Aspen unit for $75 m

 March 5, 2010 2:25 IST
Mumbai: Bangalore-based pharma company Strides Arcolab has acquired the Brazilian manufacturing facility of Aspen Pharmacare for $75 million (about Rs 344 crore).

The facility, in Campos, which manufactures antibiotics like penems and penicillins, is estimated to deliver $40 million on an annualised basis.
According to Arun Kumar, vice-chairman and group CEO, Strides Arcolab, penems and penicillins form an important part of Strides specialty injectable business and the acquisition is a well articulated strategy.
This facility was in November 2007 divested by Strides to Aspen, which is Africa’s largest pharma company, when Strides exited from its Latin American operations.
The acquisition is believed to facilitate the contract that Strides signed with US behemoth Pfizer in January 2010, whereby the two companies struck a deal to deliver 40 off-patent products, mainly injectable cancer medicines and oral medicines to patients in the US.
At a later stage, the products are likely to be sold in other countries as well.
Kumar said licensing agreements for penems have been concluded with various customers worldwide, making the acquisition an important part of Strides’ business.
The all-cash acquisition is subject to obtaining required regulatory approvals.
“We still have some regulatory approvals which we expect to take up to about 90 days…by then we should be in a position to complete the transaction,” Kumar told a television channel.
“While the regulatory approvals are on, we will take over the operations of the plant with immediate effect,” he said.
According to Ranjit Kapadia, vice-president, institutional research, HDFC Securities, Brazil is a low cost manufacturing base and Strides can use this facility to manufacture products to cater to the Pfizer deal.
“In 2007, there was no Pfizer deal. But now they can use the Brazil facility to manufacture and supply in the US, which will be cheaper than doing it in India,” he said.
Aspen is a major supplier of healthcare and nutritional products.
The group has a presence in Australia, India, Brazil, and the United Kingdom and also exports to many other territories across the globe.

My Comments:
Stride Arco's takeover of Aspen is in line with my friend told me that icici has come out with a buy call now.....


  1. hi rajeev

    do u remember recommending to go for DQ Entertainment IPO .the IPO is open for subscription on 8 th March.price band 75-80.eps around 2.5

    They are growing 30% in topline and 50 % in bottomline.My feeling is this is a good IPO.
    Waiting for your green signal.


  2. Posted by : prjayachandran
    From MMB

    This is a very capable gaming and animation company based at Hyderabad. Besides producing animation series for TV, the company is also into developing games software, mobile gameing software and mobile applications.

    The company has been winning great accolades for its productions:-

    1. DayTime EMMY Award in the `Outstanding Special Class Animated Program` category for `Tutenstein` which was co-produced with Porchlight, USA for Discovery Kids.
    ((Emmy is an award for television production and, unlike Academy or Grammy awards, are not too exclusive – there are too many Emmy awards every year. There are awards for Primetime Emmys, Daytime Emmys (DQ Entertainment had one in this category), Sports Emmys, etc. etc.)

    2. "bro`Town" produced by DQ Entertainment for TV-3, New Zealand won the Best Animated Comedy Programme as well as Best Comedy Script for the year 2005.

    3. `Delta State` co-produced with Alphanim, France won BAF 2004 for best Animated TV Series and most outstanding T.V Series award in Annecy Festival, France.

    The company`s client list spans across 14 countries includes big and reputed companies like Walt Disney Productions, Nickelodeon, Mattel, BBC Worldwide, Sony Group and international TV channels like France2 and France3.

    Expectations of valuations of DQ Entertainment can vary, as the sector has a very large valuation band. Valuation can take a hint from Crest Animations (which can be considered a decent animation company) that quotes at Rs.68 on a Rs 0.64 EPS (PE of more than 100) or Compact Disc (this company only seems to be masquerading as an animation company as I am yet to see its animations do well on the TV or movie screens) that quotes at Rs.52 on a Rs.49.20 EPS (PE of just over 1).

    Hope the issue is priced right as everything else seems to be just fine for the company.