The acquisition hungry Ajay Piramal has done it again. In one deft move, he has devoured the Indian pharma business of ICI plc for Rs 70 crores, lock, stock and barrel.

ICI India, whose March 31, 2001 turnover was Rs 69 crores, was on sale for quite a long time and found it difficult to sell as the management wanted to ensure shareholder value as well as the jobs of employees.

Quite a few companies had looked at ICI India, according to media reports, but they were not willing to go anywhere beyond Rs 55 crore for the sale. Ranbaxy Laboratories Ltd, which was among the companies keen to pick up the pharma brands of ICI, but not employees, for Rs 50 crore.

ICI India essentially operates in the cardiovascular, anaesthetics and antiseptics segment and most of the products are original ICI research products, says Khandwalla Securities senior pharma analyst C Srihari.

According to him, ICI has a good portfolio that will enhance NPIL's offerings. NPIL is better focused as ICI India is not a pharma specialist compared to NPIL. The bulk drugs portfolio has a good match with its formulations business with the active ingredient in most of the formulations business being manufactured in-house. Hence, for an acquirer (especially, one that does not manufacture these products), the bulk drugs business too could be a good pick.

Looking at the acquisition in isolation, Srihari says the buy price is a little on the upper side as all initial bids were in the range of Rs 50-55 crore.

The key brands include Rs 15 crore turnover Tenormin (atenolol) used in the treatment of high blood pressure, Rs 3 crore Tenoclor (atenolol plus chlorthalidene) a combination drug of Tenormin and a diuretic, Tetmosol (monosulfiram) for skin diseases, Nolvadex (tamoxifen) for breast cancer and Aerrane (isoflurine) launched under licence from Baxter Healthcare in the anaesthetic segment.

ICI India has a state-of-the-art manufacturing facility at Ennore near Chennai. Both bulk drugs and formulations are produced in this facility. The plant at Ennore has been repeatedly commended for its strict adherence to international practices of safety, health and environment.

With ICI India in the NPIL basket, it becomes the fifth acquisition of Nicholas Piramal India Ltd (NPIL) under the dapper chairman Ajay Piramal whose inspiration for pharma acquisitions are a far cry from medicine business but close to prime real estate.

In 1988, the Piramal group acquired Nicholas Laboratories from Aspro Nicholas Group, UK. In 1993, they bought out 74 per cent stake of Swiss drug MNC Hoffman La Roche in Roche Products. In 1996, NPIL acquired Boehringer Mannheim from the Corange group and in 2000 they took over Rhone Poulenc India Ltd from Aventis Pharma.

The Roche factory was brought down to make way for the imposing Crossroads mall, probably the only one of its kind in India. Analysts commented that the intention in the takeover was not growing pharma brands but making money from the real estate available thereby.

The share market movement tells a sorry tale, according to a former senior employee of RPIL. For those who nurtured RPIL, it was a painful day to see the company moving into the hands of Piramal.

When NPIL acquired 40 per cent stake in Rhone-Poulenc India Ltd (RPIL) from Aventis Pharma at a price of Rs 875 per share on December 22, 2000 in a cash deal for Rs 157.5 crore, the market was bullish at Bombay Stock Exchange. On that day, a Friday, RPIL shares closed at Rs 744.25 and NPIL shares closed at Rs 365.35 on the Bombay Stock Exchange. RPIL's brands include Phensedyl cough syrup, Stemetil, Essential-L, Rovamycin, Doliprane and Flagyl.

On January 25, 2002, the day when Piramal took over ICI India, the share price of NPIL stood at Rs 225.10 and that of RPIL was Rs 363.30. "Look at what has happened to my company's shares," the former RPIL employee said while speaking to this correspondent in the recent past.