Sun pharma and Strides Arcolab have finalised the deal for Strides Arcolab to acquire erstwhile Ranbaxy’s Solus and Solus Care divisions operating in the central nervous system (CNS) segment in India, for Rs 1.65 billion from Sun Pharma.
Last year, Sun Pharma acquired Ranbaxy in an all stock deal valued at USD 4 billion. The deal made Sun Pharma world’s fifth largest generic pharmaceutical company by revenue and India’s largest drug maker. Sun Pharma currently is in the midst of an integration process with Ranbaxy.
Sun pharma in its press releases stated that the recent divestment deal with strides Arcolab is of strategic significance post Ranbaxy acquisition.
As a part of the deal, Sun Pharma will transfer two divisions of Ranbaxy – Solus and Solus care for a consideration of Rs 1.65 billion. Sun pharma also reported in its press release that all the products of these two divisions together accounted for approximately Rs. 920 million in sales. Also the report suggest that all the employees of these two division will be moved to strides.
As reported by AIOCD (All India Origin Chemist and Distributors Ltd), Sun Pharma sales in the CNS category has grown by 17% on yearly basis and is at Rs 13.29 billion surpassing the industry average of 14%. India’s total sales in CNS at around Rs 82 billion as of August 2015.
Strides Arcolab in a press release stated that this acquisition is a part of its strategy in order to make a strong footing in India’s fast growing CNS market.
In Q1 FY16, Strides Arcolab posted revenues worth Rs 2,761 million, showing a growth of 6% on yearly basis. EBITDA for the quarter was at Rs 572 million, showing a growth of 5% on Yearly basis. EBITDA margins was consistent at 21%.
In Q1 FY16, Sun Pharma posted revenues worth Rs 65.22 billion, showing a growth of 3% on yearly basis. EBITDA for the quarter was at Rs 16.14 billion, showing a decline of 4.5% on Yearly basis. EBITDA margins adjusted for one-time item was at 28% compared to 30.2% last year.