Mumbai-based Unichem Laboratories Ltd has approved the sale of India and Nepal businesses to Ahmedabad-based Torrent Pharmaceuticals Ltd for about Rs. 3,600 crore.
The deal is among the largest transactions in the domestic pharmaceutical landscape.
The transaction will enable Unichem to focus attention on all aspects of the international business including finished formulations, API, contract manufacturing and contract research; increase its investments in R&D in the new chemical and biological entities (NCE &NBE), bio-similars and complex generics; and reward shareholders in the near future.
Post completion, the facilities that will continue with Unichem include formulations plants in Goa, Ghaziabad (UP), Baddi (HP); API manufacturing plants in Roha, Kolhapur (both in Maharashtra) and Pithampur (MP); Center of Excellence (CoE - R&D complex) including bio-research center in Goa.
In a press release, the company states that the board of directors of Unichem Laboratories Limited at its meeting held recently has approved the sale and transfer of Unichem's business of manufacture, sale, marketing and distribution of domestic formulations in India and Nepal, together with all specified tangible and intangibles assets, contracts, rights, personnel and employees, data and records, inventory and other assets and liabilities as agreed between the parties in relation to the said business (Transferred Business) by way of slump sale on a going concern basis, to Torrent Pharmaceuticals Limited upon terms and conditions contained in the agreements proposed to be entered into by Unichem with Torrent for a total consideration of Rs. 3,600 crore, subject to such price adjustments and amendments, if any, as may be agreed between the parties.
This is followed by the companies respective board meetings where the two companies jointly said that Torrent was entering into a definitive binding agreement with Unichem.
This is Torrent Pharma's second big-ticket acquisition in about four years, the last being its over Rs. 2,000 crore buy of Elder Pharma's India and Nepal businesses in December 2013.
Transferred business will include the portfolio of several brands in India and Nepal, manufacturing facility at Sikkim and employees performing work in relation to the Transferred Business.
The above transaction is subject to customary conditions precedent, including, shareholders' approval and is expected to close in the calendar year 2017. Unichem will remain an independent publicly listed company with no change in its existing shareholding.
Jayendra Shah played a pivotal role in successful consummation of the transaction. He was the sole financial advisor to Unichem on negotiations, valuations and deal closure. N A Shah Associates LLP, Chartered Accountants were the advisors for tax and related matters and Trans Continental Capital Advisors Pvt. Ltd. were the strategic advisors.
“We found that with Unichem's domestic business, there is significant synergy in the therapeutic segments where we are present. This will enable us gain share in the key therapiesrapidly", according to Samir Mehta, chairman, Torrent Pharmaceuticals Limited.
"We believe that the future of pharma industry will be increasingly driven by research and innovation in complex biologics and specialized generics. We have identified specific opportunities and niches which we can potentially capitalize on," according to Dr Prakash Mody, chairman and managing director, Unichem Laboratories Limited.
Unichem is a leader in niche therapy areas of cardiology, neurology, orthopedics and anti-infectives. Unichem has strong skills in product development, process chemistry and manufacturing of complex API as well as dosage forms.
Torrent is a leading player in the Indian Pharmaceutical Market with annual revenues of more than Rs. 5,800 crore and is the flagship company of the Rs.18,300 crore Torrent Group.
Unichem believes that the sale and transfer of the Transferred Business to Torrent, will enable it to deliver superior results in areas of innovative research, new chemical and biological entities. The present transaction will enable Torrent to realise cost and revenue synergies in Torrent's branded business in India.
Unichem approves sale of india, nepal busines
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