Arch Pharma acquires 42% stake in Avon

Mumbai-based Arch Pharmalabs has acquired a 42 per cent stake in Hyderabad-based Avon Organics for Rs 22.4 crore. The company may also acquire additional shares worth Rs 9 crore through an open offer of around Rs 9 crore.

Avon Organics is into manufacturing of active pharmaceutical ingredients.

Arch Pharmalabs has also earmarked an investment of Rs 150 crore for expansion of its various manufacturing capabilities. In April this year, the company acquired Watsol Organics, a manufacturer of pharmaceuticals and agro-chemical intermediaries, for an enterprise value of Rs 30 crore.

During the same month, the company bought out Sibra Pharmaceuticals Ltd, another Hyderabad-based company, for about Rs 40 crore.

The company now has six sites, including those in Gurgaon and Tarapur. It forayed into bulk drug manufacturing by taking over Hyderabad-based Merven Drug Products in 1999.

The three private equity firms "" ICICI Ventures, IL&FS and Swiss Technology Venture Capital Fund (SwissTec) "" which have been nurturing the inorganic growth of the company, currently hold 58 per cent equity in Arch Pharmalabs. Of this, ICICI Ventures holds 33 per cent while IL&FS and SwissTec have 12.5 per cent each.