Analysts have hailed the Protinex sale deal announcement on November 27, 2002 by Pfizer Ltd as good and well-structured. Pfizer Inc's Indian subsidiary will continue to record sales and profits from this brand, but declining in a phased manner over next three years. Thus the impact to the P&L account will not be severe. This makes it a well-structured deal, analysts said.
While Pfizer has stated that the outright consideration was US $ seven million (Rs 34 crore), it has not quantified the three-year revenue and profit share details between the two companies. There are reports that EAC will pay an additional Rs 34 crore for the three-year collaboration on manufacturing, co-promotion and marketing of this brand in India.
For a total of Rs 68 crore, Protinex has become a good sale deal with the price at 2.4 times the product's annual sales, analysts said.
A top notch acquisition guy said the sales multiple could be well above 2.5, considering the forecast for the next three years. A conservative estimate would however peg it at just between 2.2 and 2.4 times the annual sales of the brand.
Protinex, a food supplement that annually contributed around Rs 28 crore to Pfizer's kitty, has been sold to Danish food and nutrition company EAC Nutrition's Indian subsidiary EAC Trading Pvt Ltd.
According to international analysts, Pfizer Ltd did not have a full portfolio of food supplements like Wockhardt. As Protinex remained a prescription brand, Pfizer did not find it worthwhile to make significant efforts in the protein supplements segment to sustain a single brand, especially when it has been able to able to access new products in high growth segments (from its parent as also post acquisition of Parke-Davis and Pharmacia Group).
The main drivers for Pfizer India are - topline growth (post access to large number of new products) and margin improvement (post merger with Parke Davis).