Nicholas Piramal India Ltd (NPIL) has announced its intention to acquire the manufacturing facility of Pfizer, Inc. located at Morpeth, Northumberland., UK (Morpeth). The site is one of Pfizer's global, high-quality, integrated facilities. It has end-to-end production and supply chain capabilities that cover APIs, finished dosage, packaging and distribution.

Commenting on the transaction, Ajay Piramal, chairman, said, "This acquisition again demonstrates NPIL's commitment to provide an across-the-life-cycle and across-the-value-chain service to pharmaceutical companies. We are proud to have the highly respected Morpeth team aboard. Morpeth has a long tradition of excellence in manufacturing and supply chain. We believe we have an exciting future before us, with Morpeth playing a key role in NPIL's global CMO network."

NPIL's 100 per cent UK subsidiary, the NPIL Pharmaceuticals (UK) Ltd (earlier, Avecia Pharmaceuticals, UK) has entered into an agreement to acquire the Morpeth facility on an asset purchase basis. The transaction includes a supply agreement up till November 2011 totaling potential revenues above $350 million, site fixed assets and certain net current assets.

The company anticipates funding the total consideration to be paid and any needed incremental net current assets from its projected pre-acquisition internal accruals of FY2007. The transaction is on a liability and cash free basis. Completion is subject to required regulatory and other approvals, which are expected by June 19, 2006.

Morpeth's team of about 450 people has rich experience in new product launch, site technical transfer and operational excellence initiatives such as JIT & Right-First-Time. Its facilities are approved by US FDA and UK MHRA. Morpeth is a supply hub for certain Pfizer products supplied to USA, Europe and Japan.

The company expects significant synergies of its current operations and business pipeline with Morpeth. The Morpeth acquisition will be EPS accretive from FY2007. This transaction is NPIL's third acquisition in the UK after its acquisition of Rhodia's inhalation Anaesthetics business in December 2004 and acquisition of Avecia's Custom Manufacturing business in December 2005.

With the acquisition of Morpeth, NPIL has gained strategic entry into the global souring network of Pfizer Inc. This transaction is a higher step in the sourcing relationship that the company began with Pfizer in December 2005. In that month, the company secured a 7 - year contract manufacturing-related R&D services agreement with Pfizer International LLC under which the Company is to provide process development and scale-up services to Pfizer's animal health division. With the acquisition of Morpeth, the company will become the biggest supplier (in terms of spend) Within Pfizer's Global Contract Manufacturing network, with supplies to over 100 global markets.

For the company, the acquisition of Morpeth is consistent with its intent to become a global leader in custom manufacturing across the pharmaceutical value chain. At the transaction's completion, the company will emerge as one of the world's top-10 pharmaceuticals outsourcing companies, across custom synthesis, APIs and finished dosage. In annualised terms, the Company is expected to have custom manufacturing revenues exceed US$200 million.