The Board of Directors of Matrix Laboratories Limited (Matrix) and Strides Arcolab Limited (Strides) at their Board Meetings on June 1, 2005 in Delhi and Hyderabad respectively, have in principle agreed to a plan of merger of the two companies.
The proposed merger is subject to a valuation exercise to be conducted by an independent firm of Chartered Accountants, while the two companies will conduct due diligence of each others business.
The Boards of the two companies expect to meet within 6 to 8 weeks to finalize the terms of the plan. The merger will be effective from April 1, 2005 and is subject to shareholders’ approval of both companies and other regulatory approvals.
The combined proforma sales for the 12-month period to March 2005 were over Rs1000 Crore [US$ 240 mn] and net profits in excess of Rs170 crore [US$ 39 mn]. The Merged entity will be called Matrix Strides Limited (Matrix Strides) and will emerge amongst India’s leading integrated pharmaceutical company.
Matrix has successfully positioned itself at the upper value chain of chemistry skill sets in active pharmaceutical ingredients manufacturing backed up by strong IPR based R&D and NCE research activities. Strides is a leading finished dosage form company with domain leadership in soft gels, steriles and other dosage forms.
On completion of the merger, Matrix Strides will have 6 API facilities (4 of them approved by US FDA), 5 intermediate plants and 9 (2 of them approved by US FDA) formulation sites meeting global standards and will have operations in over 70 countries with manufacturing operations in India, USA and Latin America. The combined entity will have amongst the largest USFDA / TGA / MHRA approved manufacturing capacities. The combined entity is expected to complete 70 DMF filings and 20 ANDA filings by the end of the year.
In a joint statement issued, after their respective Board Meetings N Prasad, chairman and CEO of Matrix, and Arun Kumar – chairman & Group CEO of Strides Arcolab stated, “The coming together of two leading first generation pharmaceutical companies with similar philosophies and vision will create a significant generic company based out of India with worldwide operations. Matrix Strides will be a fully integrated pharmaceutical company with significant presence in all the value chains of an integrated life sciences company. The merged entity will be a leading provider of Anti Retroviral Drugs [ARVs] worldwide with Matrix and Strides leveraging their existing partnership. The proposed merger of the two companies will compliment each others strengths and will emerge as a leader in the global generic space, leveraging Indian innovation and a strong global partnering philosophy”
Matrix has already filed for 46 DMFs as of March 2005 and a further 24 filings are planned during the year. Matrix has also filed for 29 patents and 9 novel polymorphs. For the financial year ended March 2005, Matrix reported revenues of Rs.6.37 billion and profits after tax of Rs.1.30 billion.
Strides has the only globally dedicated soft gel facility for hormones. In addition, Strides undertakes contract research and the manufacturing of speciality chemicals for various multinational companies. Strides has a major presence in various developing countries such as Africa, Latin America and Asia as well as in developed markets such as the US, Canada and parts of Europe. Strides is one of the largest Indian suppliers of institutionally funded aid projects and is an approved supplier to the World Bank, the African Development Bank and UNICEF, amongst others.
In the recently concluded 15-month financial year ending December 31, 2004, Strides had consolidated revenues of Rs. 4.62 billion and profits after tax of Rs. 440 million.