Ahmedabad Dishman Pharmaceuticals & Chemicals Ltd is currently negotiating with a few large pharmaceutical companies in Germany, France, UK and Ireland for acquisition to build up its presence in these markets.
The plan is to acquire manufacturing facility- of any of these companies and thereby consolidate its position as a global contract manufacturer, according to J.R. Vyas, chairman, Dishman Pharma.
“In the facilities we have eyed, some of our existing and new intermediates and APIs could be manufactured,” said Vyas.
Some of the important intermediates currently being manufactured by Dishman Pharma are for Omeprazole, Lanzoprazole, Loratadine, Proxetin and Losartan. Major APIs manufactured by the company are Thioridazine, Xipamide, Omeprazole and Glipizide.
Dishman would be utilising the route of Leveraged Buyout (LBO) financing for its acquisition, said Vyas. According to him, several pharmaceutical companies in Europe have excellent manufacturing facilities, but would not like to manufacture themselves due to cost factor. So they would like the facility to be sold to another company through the LBO route. The advantage with LBO being, the seller’s facility serves as security for the loans taken by the acquiring firm (from banks and financial institutions). The latter repays the loans out of the cash flow of the acquired company, its profits or by selling its assets.
The recent IPO of Dishman Pharmaceuticals at the Bombay Stock Exchange has been successful. The Public Issue of 3,433,500 equity shares of Rs.10 each by the company has been oversubscribed 7.31 times at the close of bidding on April 5, 2004.
Dishman currently serves a number of MNCs, including Solvay Pharmaceuticals B.V. of Netherlands, with whom the company has a long-term supply contract for patented anti-hypertensive drug Iprosartan Mesylate whose patent expires in 2013.
For its overseas marketing and business development, Dishman has set up subsidiary companies like Dishman Cyprus Ltd, Dishman USA Inc, Dishman Europe, Dishman Holland B.V. and Dishman Africa.