Indian pharma company, Cipla Ltd, has said that the company is in preliminary discussions to buy Cipla Medpro, its South African distributor.
The company said that it has made an indicative proposal to the South African company for a 51% stake valued at Rs 1,210 crore based on the current exchange rates of the given currencies. Per share, Cipla has offered to pay Cipla Medpro ZAR 8.55 per share. This valuation does not include the maximum dividend of ZAR 0.10 per share that Cipla Medpro is expected to give to its shareholders at the end of the current fiscal.
Cipla said that the discussions are subject to various conditions, including finalisation of due diligence, execution of definitive documentation, applicable board, regulatory and other approvals. The company further said, “At this stage, there is no certainty that these discussions will lead to a firm offer being made or a transaction being consummated.”
The shares of Cipla Ltd climbed 2.61%, at Rs 389.70 per share on the Bombay Stock Exchange on Wednesday post the announcement of this news.
Cipla Medpro is a distributor of Cipla Ltd’s products in South Africa and its neighbouring countries. The company is said to be South Africa’s fastest growing pharmaceutical companies and is currently the third largest.
At the end of the second quarter dated September 30, 2012, 56% of Cipla Ltd’s revenues came from its business outside of India. Its net profit grew to Rs 500 crore in the given quarter as against Rs 309 crore in the corresponding quarter of last year.
The exports of formulations in the second quarter grew by 38.2% to Rs 1,039 crore and exports of APIs went up by 9% to Rs 174 crore.
