The Chennai-based Shasun Drugs and Chemicals Ltd. (SCDL), which acquired the pharmaceutical custom synthesis business of the Rhodia group for an undisclosed amount last week, will invest about US $ 32-35 million in the new acquired business within the next two years.
Announcing the details at a press meet in Mumbai today, S. Vimal Kumar, joint managing director and N. Govindarajan, chief executive officer of SCDL said the funds for expansion would be met through internal accruals, debt route, dilution of promoters equity and through public offer, likely to be done in another six months. Requirements of due diligence and documentation have been completed and the deal has been done through its wholly owned subsidiary Shasun Pharma Solutions Ltd., UK.
The acquired business, which had revenue of 60 million euros in 2005, has a strong pipeline of about 14 pre-launch products and these are at an advanced Phase III stage trials. The acquisition would help Shasun to grow marginally and become Rs 750 crore to Rs 800 crore company by 2007 and Rs 1000 crore company by 2009, hoped Govinadarajan.
The transaction includes all of Rhodia's development and custom manufacturing services catering to innovator and emerging pharma clients in the US, Europe and Asia. The transaction includes UK manufacturing sites at Dudley and Annan in Scotland, besides a development centre and pilot plant at Dudley, together with a capacity of 525 Cu.M. The current management team and employees of the acquired business with a total strength of 349 have been retained, informed the officials.
"In the inorganic growth segment, Shasun is open for more acquisitions, especially research driven companies outside India. The current focus is to turnaround the acquired business and make it a successful venture. We also have to mobilise funds for future growth areas," said Vimal Kumar.
Govindarajan said Shasun has invested about Rs 125 crore in the Knowledge Management Centre at Velacherry and in developing plants at Pondicherry. Further, the company plans to set up Rs 45- crore multipurpose plant at the Pharma City in Vizag, likely to start pilot production by June and commercial production in 2007.
The company has roped in strategic marketing alliances with Glenmark and Actavis (Apharma) for marketing the formulations in the US and Europe and talks are on with a few other companies. Talks are also on with an Indian company to soon market Gabapentine, the anti-epilepsy drug in the US market. The company is also looking at biopharmaceuticals as a major thrust area for growth in future and has invested about Rs 10-12 crore in this segment. Shasun already has secured the IP rights for Streptokizine, a clot bluster drug, innovated under sponsorship programme by IMMTECH, Chandigarh.