Ranbaxy Laboratories Ltd has announced the acquisition of Be-Tabs Pharmaceuticals (Pty) Ltd ("Be-Tabs"), in South Africa, for a total consideration of USD 70 mn.

The transactions, subject to requisite approvals from South Africa's competition council authority, are expected to be completed in the first quarter of the year 2007.

The acquisition will be EPS accretive in year one. Be Tabs, the 5th largest generics player, is amongst the most established companies in South Africa with an excellent brand equity and a good profitable track record. Be Tabs is a significant acquisition in a market that is large and growing with high entry barriers. The acquisition further strengthens the company's South Africa operations and places the company amongst the top 5 generic players in the market. Be Tabs has a strong OTC portfolio with significant brand recognition that can be leveraged with wholesalers, pharmacists and consumers.

The company is the largest Penicillin manufacturer in South Africa. The transactions will be funded from company's FCCB proceeds. The transaction is valued at 2.2 times of sales and 7.7 times of EBITDA multiples.

Commenting on the acquisition, Malvinder Mohan Singh, CEO and Managing Director, of the company said, "The acquisition of Be-Tabs' results in considerable synergies and further strengthens Ranbaxy's foothold in South Africa. It reinforces our position by expanding our portfolio in a key market that is exhibiting strong growth potential. The move will help us to provide effective disease management solutions in support of the government's objective to make healthcare affordable to a wider cross-section of the population."

On the occasion, Desmond Brothers, CEO of Ranbaxy South Africa, said, "We are pleased with the acquisition of Be-Tabs. It is our clear intent to accelerate our growth in the local market. Ranbaxy with its India centric advantage is well positioned to leverage these competencies and capture the synergies unleashed in the process, for the benefit of the South African market."

South Africa is the largest pharma market in Africa, valued at close to USD 2 Billion (Private market size as per IMS), with a high potential for generic growth (IMS). Ranbaxy South Africa commenced its commercial operations in 1996, and has demonstrated healthy growth. The company caters to acute, chronic and OTC therapeutic segments.

Be-Tabs Pharmaceuticals (Pty) Ltd is the largest manufacturer of Penicillin formulations in South Africa and markets and manufactures a portfolio of ethical and over-the-counter (OTC) solid-oral and liquid formulations in South Africa. The company actively participates in local and export tenders in the African continent with sales of approximately USD 30 Million.

Be-Tabs is the fifth largest generic company in South Africa and one of the most profitable companies in the market. Be-Tabs Pharmaceuticals (Pty) Ltd was founded in Johannesburg, South Africa, in 1974 and focuses on producing the highest quality products in a competitive pharmaceutical environment. Since its early beginnings, the company has established itself as a dynamic pharmaceutical house with the object of serving South Africa and the neighbouring countries with the best service and products possible.