Ranbaxy acquires Terapia

$324 mn deal for Romanian firm.

Ranbaxy Laboratories Ltd has acquired 96.7 per cent of Romania's largest independent generics drug company, Terapia SA, for $324 million.

This is the company's third overseas acquisition this month after it bought the unbranded generics business of Allen SpA in Italy and the auto-injector business of US-based Senetek Plc.

The deal makes Ranbaxy the leading generics player in the $1.2-billion Romanian pharmaceuticals market, the fastest growing market in the central and eastern European regions.

"We will have a 5.5 per cent market share. Terapia comes with its excellent facilities, which will become our manufacturing and strategic business hub for servicing Europe, the CIS countries and even Latin America. The synergies are immense," Ranbaxy's Chief Executive Officer and Managing Director Malvinder Mohan Singh said.

The acquisition will add around $80 million to Ranbaxy's turnover, which was $1.2 billion in the last financial year. The deal value is 11.6 times Terapia's last 12 months' EBITDA. The company's stock rose 3.36 per cent on the Bombay Stock Exchange to close at Rs 411. 15, up from the previous day's close of Rs 397.80.

Terapia has marketing rights for 157 drugs and owns two manufacturing units. The acquisition will give Ranbaxy a beachhead in other countries of the region as 30 per cent of Terapia's product portfolio are registered in 15 countries, including Russia, Ukraine and Poland.

"We will be introducing our products in Romania and will take Terapia's products to the rest of Europe. Terapia already has marketing approvals and that is definitely a short-term objective. Once the USFDA approvals start flowing in, we will take the portfolio to the US too. But that will be a medium-term story," Singh said.