Piramal to acquire drugs from UK's Mallinckrodt for Rs 1,162 cr

Also annouces demerger of healthcare, financial services

Pharmaceutical major Piramal Enterprises on Monday said its wholly owned critical care subsidiary in the UK has entered into an agreement to acquire a portfolio of drugs from Mallinckrodt LLC for a consideration of $171 million.

The company statement said: "...Wholly owned critical care subsidiary in the UK has entered into an agreement to acquire a portfolio of spasticity and pain management drugs from Mallinckrodt LLC in an all cash deal for a consideration of $171 million."

The statement further said: "An additional $32 million (was) payable depending on financial performance of the acquired assets over the next three years."

It is the company's seventh acquisition in the last two years, taking its investment for inorganic growth to Rs 3,000 crore across its pharmaceutical businesses.

"All these acquisitions are expected to be value accretive and will improve our pharmaceutical segment's growth and EBITDA in percentage and in absolute terms," said company chairman Ajay Piramal.

"This transaction is a step further in our strategy to make investments, in both internal developments and acquisitions, to expand our presence in the global generic hospital drug market, which is greater than $20 billion in size," he said.

"This is our second acquisition in the last four months, following our acquisition of a portfolio of anaesthesia and pain management injectable drugs from Janssen Pharmaceutica NV," Piramal Critical Care's CEO Peter DeYoung added.

Piramal Enterprises also announced that it will demerge its healthcare and financial services businesses soon.

"We want to ultimately look at Piramal Enterprises as separate business for pharmaceuticals and financial services. In the medium term we will do that. All our acquisitions, and in some ways moving up in value chains and getting more critical mass are steps towards that," Ajay Piramal told reporters.

Declining to give a timeline, Piramal said "we have not yet fixed timeline. I think the Board will decide, but the direction is moving towards that."

Ajay Piramal curtailed his presence in healthcare after he sold erstwhile Piramal Healthcare's domestic formulations division for $3.7 billion to Abbott in 2010. The company entered into the finance business through strategic investments and joint ventures.

Piramal Enterprises is growing largely organically with a CAGR of 17% over last the five years.