Strides Arcolab Ltd said it has begun the process for acquiring the brands of the Chennai-based Grandix Pharmaceuticals. These brands are from Grandix's domestic market portfolio.
The deal, if it comes through, will be first Indian acquisition for Strides. The company made around six joint ventures and strategic acquisitions in Europe and Singapore between 2003 to 2006. A Strides Arcolab statement to the BSE on Tuesday said its Board has given in-principle approval to acquire the entire shareholding of Grandix.
In a telephonic interaction with Pharmabiz, Arun Kumar, CEO, Strides Arcolab, said the company would now start negotiations with Grandix for its range of brands. "We will now start evaluating the brands to fix a value before the deal is inked," he added, without disclosing the details.
Dr A Ramamurthy, managing director, Grandix Pharmaceuticals was not available for comments when Pharmabiz tried to reach him.
The Rs 760.2 crore Strides is only in the export arena. It manufactures formulations in various dosage forms, including capsules, tablets, liquid injectables and is one of the world's top five manufacturers of softgel capsules. The company undertakes contract research and the manufacturing of specialty chemicals for multinational companies. It has a major presence in US, Canada, parts of Europe, Africa, Latin America and Asia. It is one of the largest Indian suppliers to international funded aid projects and an approved supplier to the World Bank, African Development Bank and UNICEF. Its 14 manufacturing plants are located in US, Brazil, Mexico, Italy, Poland, Singapore and India with ISO 9001, ISO 14001, GMP, US FDA and UK MHRA accreditations. It holds product registrations in over 37 countries.
According to industry experts such inorganic growth strategies are pursued by companies for higher growth margins. Grandix Pharmaceuticals commenced operations in 1996. Its portfolio include antibiotics, NSAIDs, pulmocare, anti diabetics, anti hypertensive/cardiology, nurtraceuticals and vitamins for neuro disorders.
Its products include solid oral dosage formulations with a current annual production capacity of 700 million tablets.
In order to make the best of the excise duty on MRP, Grandix set up three facilities in Himachal Pradesh in August 2006 and had shifted 50 per cent of its production to these three plants, which, it is understood, are now its contract manufacturing facilities.
In December 2006, the company signed a deal to sell its plant at Alathur near Chennai to Iceland's generic major Actavis. The plant employs 100 people.