Jagdale Industries has sold its ORS-L brand, a ready-to-drink product enriched with electrolytes to Johnson & Johnson Pte. Ltd. Although the financial terms of the transaction is not known, it is gathered from sources that the sale was valued at Rs.750 crore. MAPE Advisory Group were the only bankers to this deal.

The patented ORS-L brand developed by Jagdale gained its momentum in the market as an easy-to-consume and non invasive process of fluid replacement at home which decreased hospitalisation. ORS-L brand provided dehydration relief instantly during exhaustion and covalence. It was much-sought for its efficacy as an adjuvant in antibiotic and antiviral therapy, besides recommended for pre-and post operative phases and as a sports drink among others.

The ORS-L 200 ml tetra pack in four flavours of lime, apple, green apple and orange adopted the aseptic manufacture and packaging technology.

Jagdale is a multi product pharma company with eight divisions known for its range of analgesics and vitamins. The company was drawn into discussions for its ORS-L brand by Indian pharma companies including Mankind which came close to final negotiations to purchase it. The product was known for its successful prescription and over-the-counter sale following its effectiveness in dehydration.

“Now we will look at increasing our efforts in bagging more patents for the range of nutraceuticals and other pharma products”, Rajesh Jagdale, managing director, Jagdale Industries, told Pharmabiz.

“However, we will continue to manufacture the product for Johnson & Johnson at our facility in the outskirts of Bengaluru,”he added.

For Jagdale Industries, the key objective of the sale was its impressive valuation and its acquisition by a global multinational has given the company a big boost to its capability in research and quality manufacture, noted a section industry experts.

The estimated current value of the ORSL brand is around Rs.150 crore. There is a presence of both multinationals and Indian pharma including Merck, Abbot, IPCA, Mankind, Lupin and Ranbaxy.

The importance of oral rehydration salts (ORS) therapy is emphasized by World Health Organization and UNICEF for diarrhoea and vomiting to control infant fatality ensuing from dehydration. Since 2006, the introduction of ORT led several pharma majors to look at this segment as a value addition to their non pharma product mix and generate revenues.

The Singapore-based Johnson & Johnson Pte. Ltd is part of the Johnson & Johnson Family of Companies. The global pharma major has been looking out for buyouts of promising Indian brands and Jagdale in Karnataka fitted the bill and enabled completed acquisition of the ORSL brand.

Under the agreement, Jagdale Industries will provide transition services in the area of manufacturing, detailing and distribution of ORS-L thereby ensuring consumers could access benefits of the popular electrolyte drink.

According to Thibaut Mongon, Company Group Chairman, Johnson & Johnson Family of Consumer Companies Asia Pacific, India is a very important market and we are pleased to add the ORSL brand to our portfolio of consumer health care brands in India.

“This acquisition will allow us to expand our consumer health care offerings in line with our vision of helping consumers lead healthy vibrant lives”, added Mongon.

In Karnataka this is the second acquisition in 2014 after Meiji Seika Pharma Co Ltd, acquired Medreich Ltd, for Rs.1720 crore ($290 million) in June.