Though the parties have not reached a final valuation, deal size for the Hyderabad-based firm may be around Rs 400 cr.
The target company, Aptuit Laurus, is a joint venture promoted by former Matrix Laboratories’ chief operating officer (COO) C Satyanarayana and US-based Aptuit Inc. Lonza is targeting to buy over 51 per cent of the stake held by the US company in Aptuit Laurus, said sources.
Though the parties have not reached a final valuation, the deal size for a majority stake could be in the range of Rs 350-450 crore, said sources.
Lonza has a turnover of Rs 11,500 crore and has been on the lookout for an acquisition in India for four to five years, but high valuations were a deterrent, they added. The company has a sales and marketing office in India.
Satyanarayana, a scientist with over 25 years of industry experience, played a key role in transforming Matrix Laboratories into a major pharmaceutical company. He had founded Laurus Labs with two colleagues in late 2005, with significant personal investment from him and his co-founders.
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In 2007, Aptuit teamed with Laurus Labs to form Aptuit Laurus. The US partner committed to invest $100 million (Rs 455 crore) for expansion in the Indian facility over four years. However, the alliance turned sour within a year, following top management changes at Aptuit Inc in 2008, according to sources. Business conditions also worsened with the global slowdown.
“We don’t want to comment on the market speculation or rumours,” Satyanarayana replied to Business Standard queries in an e-mail, on Monday.
Later, talking over the telephone, he said the “articles of association with Aptuit are still valid” and would not comment any further.
“As a rule, we do not comment on any market speculations. However, India is certainly an interesting market for Lonza and we already have activities in India,” said Dominik Werner, media relations head of Lonza, in an e-mail.
Another e-mail sent to Aptuit spokesperson Krystle Ficco on Saturday last week remained unanswered at the time of filing the copy.
Michael Griffith, founder and chief executive and Tony Ecock, chairman of Aptuit’s Board of Managers, had left the company in August 2008. Five-year-old Aptuit Inc, which employs over 2,000 employees in 15 global facilities and with over 800 clients, is owned by private equity players such as Welsh, Carson, Anderson & Stowe, one of the world’s largest private equity investors.
Currently, Aptuit Laurus has a large-scale drug research and development centre at Hyderabad, and a 100 per cent export-oriented manufacturing facility at a 34-acre campus in Jawaharlal Nehru Pharma City in Visakhapatnam. This has approval from the US Food and Drug Administration (FDA) and other leading drug regulators.
It also runs the Aptuit Informatics facility at White Field in Bangalore, which is exclusively focussed on Clinicopia, an industry-specific clinical trial supply management outfit.
Sources said Aptuit Laurus has a turnover of Rs 220-250 crore and employs over 600 people at the three sites.
In the changing global drug making scenario, India is an important destination for all global players, since manufacturing, research and development expenses are over 40 per cent cheaper than in the developed countries.