Aurobindo Pharma Limited announced on January 07th the signing of a binding agreement by and through its wholly owned step - down subsidiary, Agile Pharma B.V, Netherlands, to acquire Generis Farmacêutica S.A. from Magnum Capital Partners . Generis is a company engaged in the manufacture and sale of pharmaceutical products in Portugal. Closing of the transaction is conditional on obtaining necessary approvals from Portuguese authorities.
The total consideration for the acquisition is €135 mn . The acquisition includes the manufacturing facility in Amadora, Portugal, which has the capacity to manufacture 1.2bn tablets/capsules/sachets annually .
This deal consolidates Aurobindo’s footprint in Portugal, which currently consists of Aurovitas, Unipessoal LDA and Aurobindo Pharma (Portugal), Unipessoal Limitada . The consolidated APL group will rank #1 in the Portuguese generic pharma market, and will have the largest generic product portfolio consisting of 271 products.
Management estimates that the net sales for the acquired business will be approximately € 72 million in 2017 , compared to € 64.8m n in 2016 . Adjusted EBITDA estimate for 2016 is €12.7m n which is projected to improve to €15 .8 m n EBITDA in 2017 .
Synergies from Aurobindo’s vertical integration and pipeline breadth, improvement in Amadora plant capacity utilisation by servicing both local and European markets, and advantages from being the #1 generic group in Portugal, are expected to be €2m n in 2018, €5m n in 2019, and expected to improve further thereon .
Aurobindo has been steadily expanding its European footprint since 2006, via acquisitions across several key markets, most notably in 2014 with the acquisition of Ac tav is’s commercial operation s in seven Western European countries . The acquisition of Generis, thus, builds upon an already successful growth strategy.
Commenting on the transaction, Mr V . Muralidharan, SVP of European Operations for Aurobindo said: “The acquisition of Generis , by leveraging its strong portfolio and unrivalled brand recognition , will allow us to establish ourselves as the top generics player in the Portuguese market . The combined entity will benefit from a robust pipeline covering all major m olecules coming off - patent in the next five years. The acquisition includes a state of the art manufacturing facility based in Portugal, which will allow us to better serve both the local Portuguese market and the broader European market, particularly with regard to small volume products and also to meet timelines for low lead time tenders . This acquisition , coupled with our past acquisition activity, underlines our commitment to focus on growth initiatives in Europ ean markets, and will be a key driver of growth for the future . Given our past experience, we expect a seamless integration of Generis with the rest of the company. ”
Mr Paulo Lilaia , CEO of Generis, said: “ Generis will benefit immensely from Aurobindo’s v ertical integration and strong product pipeline. Our large portfolio along with our unmatched commercial presence i n Portugal will allow Aurobindo to consolidate its market position in Portugal. We look forward to the opportunities this transaction will create.”
This announcement does not constitute a recommendation to shareholders or potential investors.
Campos Ferreira, Sá Carneiro & Associados , Portugal acted as the legal adviser to Aurobindo. Grant Thornton India LLP acted as the financial due diligence adviser to Aurobindo. Jefferies International Limited acted as the financial adviser to Magnum Capital Partners. Garrigues acted as the legal adviser to Magnum Capital Partners.
About Aurobindo Pharma Limited:
Aurobindo Pharma Limited ( www.aurobindo.com ) (NSE: AUROPHARMA, BSE: 524804, Reuters: ARBN.NS, Bloomberg: ARBP:IN) , headquartered at Hyderabad, India, manufactures generic pharmaceuticals and active pharmaceutical ingredients. The company’s man ufacturing facilities are approved by several leading regulatory agencies like US FDA, UK MHRA, Japan PMDA, WHO, Health Canada, MCC South Africa, ANVISA Brazil. The company’s robust product portfolio is spread over 7 major therapeutic/product areas encompassing Antibiotics, Anti - Retrovirals, CVS, CNS, Gastroenterological s , Anti - Allergies and Anti - Diabetics , supported by an outstanding R&D set - up. The Company is marketing these products globally, in over 150 countries