Dishman to buy Solutia's pharma arm

City-based Dishman Pharmaceuticals & Chemicals announced to have reached a definitive agreement to acquire the pharmaceutical services business of Solutia Inc, comprising CarboGen and AMCIS AG (Carbogen-AMCIS).

Rabo India Securities, which is a 100 per cent subsidiary of Rabo India Finance Pvt Ltd, is the sole financial and strategic advisor to the company on the transaction.

Under the terms of the agreement, Dishman will purchase 100 per cent of the stake of CarboGen and AMCIS from Solutia Europe SA / NV (SESA), as well as certain other assets used in the pharmaceutical services business, for a consideration of $74.5 million, which includes working capital of $8 million.

This is one of the largest overseas acquisitions made by a company based in Gujarat. Carbogen-AMCIS is a leading pharmaceutical services provider, offering a broad portfolio of drug development and commercialisation services to the pharmaceutical and biopharmaceutical industry at all stages of drug development since 1982.

Carbogen-AMCIS' pharmaceutical services business has world-class research and development facilities at three sites in Switzerland "� Aarau, Bubendorf and Neuland.

The company differentiates itself by the quality of its technical capabilities and its integrated platform, which provides seamless solutions to the world's leading pharmaceutical and biotechnology companies.

During 2005, the business had a turnover of approximately CHF 80 million, based on which Carbogen-AMCIS has developed a strong, loyal and satisfied customer base among medium-sized pharma and biopharma companies.

Carbogen-AMCIS generated approximately 90 per cent of revenues in 2005 from repeat customers.

All intellectual property, patents and trademarks, customer contracts, as well as employees, of the pharmaceutical services business have been included in the transaction.

Dishman hopes to enhance the business prospects of Carbogen-AMCIS by driving synergies between the two companies.

Expanding the product suite and renewing the focus on key accounts will enhance the scale of operations. The Indian and Swiss businesses can jointly serve the entire drug lifecycle of 15-20 years.

Dishman also hopes to leverage its competency in operational efficiency in India to improve margins in the Swiss operation.

This acquisition will boost the company's contract manufacturing business from Carbogen customers and it will now be the only contract manufacturing organisation in India with high-potency manufacturing capability.