Stride Arco is moving ........today 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 call.....one friend told me that icici has come out with a buy call now.....