Pharmabiz
 

Strides sells generics business in Australia & Southeast Asia to Watson Pharma for Rs. 1970-cr

Our Bureau, BengaluruTuesday, January 24, 2012, 13:25 Hrs  [IST]

Strides Arcolab Limited has sold 94 per cent shareholding in Ascent Pharmahealth Limited, its subsidiary with operations in Australia and Southeast Asia, to Watson Pharmaceuticals, Inc.  As part of the transaction, Watson also acquired the remaining 6 per cent shareholding associated with Dennis Bastas, CEO of Ascent.  The transaction was signed and closed simultaneously.  The cash offer from Watson values Ascent at an enterprise value of AU$ 375 million which amounts to around Rs. 1970 crore.  After this announcement Strides' scrip jumped by nearly 16 per cent on BSE and reached at its 52-week high of Rs. 488.80.
 
Ascent is a top five generic pharmaceutical company in Australia and is present across several countries in Southeast Asia, including Singapore where it is the leading generic pharmaceutical company.
 
Watson is an integrated global specialty pharmaceutical company engaged in the development, manufacturing, marketing and distribution of generic pharmaceuticals and specialized branded pharmaceutical products focused on Urology and Women's Health.  Watson has operations in many of the world's established and growing international markets.
 
Commenting on the transaction, Arun Kumar, Executive Vice Chairman and Group CEO of Strides Arcolab, said:  “The sale of Ascent is a value enhancing and forward-looking initiative for Strides.  We have been clear about our intention to focus on our highly attractive steriles segment, which we expect to be our growth engine going forward.  The transaction further facilitates the execution of this strategy and unlocks significant value for the Group.  Furthermore, the proceeds from the transaction considerably strengthens our balance sheet.”
 
Over the last six months, the Strides–Ascent partnership generated significant economic benefit through the transformation of the latter into a vertically integrated generics business with a robust portfolio of marketed and newly developed pipeline products.  In addition, we further expanded the business from its home market in Australia to establish a scalable platform across high-growth emerging markets in Southeast Asia, said the  Strides chief.
 
“Combining the product portfolios and commercial infrastructures of Ascent, Watson creates a substantial generics business in the region and provides Ascent with a number of new growth opportunities.  We believe that Ascent, its partners, customer and employees across all of its markets will benefit from the continued development under its new owners,”  he added
 
Paul Bisaro, president and CEO of Watson, said:  “The acquisition of Ascent provides Watson with a successful commercial structure in both Australia and Southeast Asia and a broader pipeline of products to support continued growth.  We are excited to welcome the Ascent employees in Australia and Southeast Asia to our growing global team and anticipate a seamless and rapid integration of the Ascent businesses.”
 
Jefferies International Limited acted as sole financial advisor to Strides Arcolab.  Middletons, Herbert Smith LLP and DSK Legal acted as legal counsel.
 
Strides Arcolab, has 13 manufacturing facilities across 5 countries with presence in more than 75 countries in developed and emerging markets.  It is supported  by a 350-scientist team operating out of its global R&D Centre in Bengaluru .
 
Agila Specialties Private Limited is the specialties unit of Strides Arcolab which was spun off as a separate division post the company’s restructuring in 2009.  It is engaged in the production of oncolytics, penems, pencillins, cephalosporins, ophthalmics, peptides and biosimilars. It  operates from 8 world class global manufacturing facilities, including one of the largest steriles capacity in India and amongst the largest lyophilization (freeze drying) capacities in the world.  Its  marketing network covered 70 countries and it has partnerships with leading pharmaceutical companies globally.

 
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