Hikal buys Danish firm for Rs 28 crore

Hikal announced that it has acquired a 50.1 per cent majority stake in Denmark-based Marsing & Co for $6 million (approximately Rs 27.6 crore).

Marsing is a pharmaceutical marketing and distribution company having around 1,200 customers and a distribution network in 100 countries across Europe, Latin America, Africa and the Middle-east.

Jai Hiremath, vice-chairman and managing director, said, "The acquisition provides us with an access in key European markets such as Germany, France and Italy, which are now opening up to generic drugs. It also provides us with a manufacturing base in Germany."

The company is looking at Japan and US for similar tie-ups and acquisitions, he added.

The buyout was funded through a 1:1 mix of internal accruals and debt from Exim Bank.

Marsing manufactures veterinary medications through its 100 per cent subsidiary, Bremer Pharma, based in Germany. Its 100 per cent French subsidiary Instel Chimos is an authorised distributor for finished doses and medication to hospitals in France. The company also has warehousing facilities in Europe and Africa.

"The acquisition will increase Hikal's combined turnover to around Rs 500 crore in the coming year and also increase the share of pharmaceuticals to around 70 per cent of our turnover," Hiremath said.

Hikal is targeting a turnover of around Rs 225 crore for the current year against a turnover of Rs 167 crore, during the year ended March 31, 2004. While pharmaceuticals comprise 35 per cent of the company's turnover, agro-chemicals account for the rest.

The company will also ramp up its capacity to cater to an increase in demand, Hiremath said. "We could invest up to Rs 50 crore to enhance our capacity this year," he added.