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| Exchange Disseminated Time | Marksans Pharma Ltd has informed BSE regarding a Press Release dated August 27, 2008 titled "Marksans Pharma acquires UK's leading generic pharma company Relonchem Ltd"
Press Release:
- The acquisition will help Marksans Pharma make deep and Immediate Inroads in the high growth, regulated UK generic licensing market of wholesalers, retailers and hospitals.
- Relonchem is one of UK's leading generic drug Company, licensing, marketing and supplying generic pharmaceutical products in major therapeutic clause.
- Dual synergies for Marksan : a) access to front-end sales and marketing network in highly regulate but profitable markets of UK and Europe b) huge cost efficiencies by transferring Relonchem's UK manufacturing needs to its India operations. Marksons fully integrated manufacturing facilities and infrastructure will help the acquired company to go to the market with a low cost model.
- UK is Second-largest generics market in the European Union (EU) after Germany, accounting 26% of the region's total value. The UK generics market is one of the world's largest in terms of both size and generic penetration with a projected size of US $ 7.6 billion by 2009.
- Pricewaterhouse Coopers Private Ltd, India (PWC) was the Exclusive Financial Advisor to Relonchem for this transaction.
Marksans Pharma Ltd, one of India’s leading mid-size vertically integrated pharmaceutical company, today, announced the acquisition of Relonchem Ltd, a leading UK based generic pharmaceutical company for an undisclosed sum. Relonchem Ltd has clocked sales of US $ 32 million (approx.) and adjusted EBITDA of US $ 5 million (approx.) in the FY 2007. The recent acquisition will give Marksans Pharma an immediate sales and marketing front-end access to the highly regulated and lucrative generic medicines market in UK and Europe. The Company expects to derive significant cost benefits by transferring Relonchem Ltd manufacturing operations to its state-of-the-art India manufacturing facilities.
Management Comments:
Commenting on the latest acquisition, Mark Saldanha, Managing Director, Marksans Pharma said, “The acquisition gives us an immediate and deep marketing, distribution and sales presence in the highly profitable but regulated generic markets of UK and Europe Relonchem is a profitable Company with significant product licenses, demonstrated success in procurement of product dossiers, distribution and sale of pharmaceuticals. With its profitable operations and immense market opportunity, this acquisition will be profitable from the beginning, adding value to all our stakeholders. This is our second acquisition in Europe after Bell’s & Sons and is a significant milestone which will become one of the key drivers to Marksans’ global growth strategy."
Commenting on becoming a part of Marksans Pharma, John Ruprai, CEO, RelonChem Ltd said "All of us at RelonChem are excited to becomes a part of Marksans Pharma; we will together carry forward our market leadership in generic manufacturing in UK and Europe. A value added Indian manufacturing base of the company will give us remedndous cost benefits and create value among our customers locally. It is a strategic fit and we hope to serve our customers in a more efficient way in an ever increasing competitive market, thus adding value to the patient care system in UK and Europe."
Rajesh Vig, Executive Director, Corporate Finance, Pricewaterhourse Coopers Ltd., India. said “The acquisition of RelonChem by Marksans Pharma is another example of a strategic cross border M&As by mid-size Indian Pharmaceutical companies. With global pharmaceutical companies facing tremendous pressure due to a drying R&D drug pipeline, rising costs and imminent generic competition from drugs going off patent, the generic drug market is the next big opportunity for the industry. This acquisition will create value in front-end sales and marketing reach and bockend manufacturing efficiency for Marksans white providing Relonchem with an ideal partner for future growth."
Cost of acquisition:
The acquisition is on a debt free, cash free basis. The purchase price for transaction has not been disclosed. Relonchem currently has profitable operations with high growth outlook and will add to Marksans earnings from the date of acquisition. In the FY 2008, Relonchem had a top line of US $ 32 million (approx.) and adjusted EBITDA of US $ 5 million (approx.). Marksans plans to use a combination of cash-in-hand and debt to fund the acquisition. The transaction is subject to the customary closing conditions and necessary
regulatory approvals.
Strategic fit and business raffonae:
The acquisition of Relonchem, a well-established generics pharmaceuticals company in UK is an excellent strategic fit for Marksans Pharma, as it gives access to the Company to the highly regulated but high growth, generic UK and European markets immediately.
Relonchem is a leading pharmaceutical marketing and distribution provider with strong sales and marketing expertise, it is a supplier to major national distributors, regional distributors and global generic players in UK. It has very good technical and regulatory expertise with a highly reputable track record for attaining MHRA approval for the products, complex technical transfers and registration of new developments in Europe. It has commercial experience of molecule lifecycle management and ability to replicate its market share successes and expansion into Europe. Its people resources boasts of an excellent team, fully integrated with the Indian pharmaceuticals market, optimising its management skills to source competitive services for the regulated markets of Europe.
The company has a strong product portfolio and has granted 47 product licenses with 36 licenses pending in UK, Denmark, Finland and Ireland, 36 products are commercialized as of now. Its products cater to wide range of therapeutic segments like and infective, anti-depepressant, antibacterial, antifungal, cardio-vascular, diuretics, anti-diabetes, anti-ulcer, analgesics and sex-hormones. It has a robust pipeline for new product development and the company has identified a range of developments in the narcotic and dermatological segment.
Marksans Pharma’s India manufacturing facilities will become a production base for the drugs being sold in UK and Europe. Also, for new product development, the Company’s Contract Research and Manufacturing Services (CRAMS) capabilities in India will help in quickening the process at significantly lower costs.
Conclusion:
At a macro level, this is another important step by the Company in creating a complete value chain of self-sufficient business models for itself. While building state-of-the-art, regulatory compliant manufacturing and R & D facilities in India that enjoy cost efficiencies, the Company it also creating front-end marketing and distributor network for sales across the world. Thus, reduced costs and a self-owned network of front-end distribution, marketing and sales capabilities will lead to higher margins and profits, while adding significant value to the healthcare systems across the globe." |
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