Jubilant buys US R&D unit for $33 mn

First ever acquisition of an American CRO by an Indian company.

Shyam and Hari Bhartia-controlled Jubilant Organosys Ltd has acquired 100 per cent equity in Target Research Associates, a US-based clinical research organisation, for $33.5 million (around Rs 145 crore) in an all-cash deal.

This is the first ever acquisition of an American CRO by an Indian company and is in step with Jubilant's strategy for establishing a presence in the global CRO space.

With this, Jubilant has become the largest Indian CRO with operations in India and the US. A statement issued by the company today said the purchase price assumed zero closing working capital on the date of acquisition and was subject to adjustments in case of a change in the working capital.

Target is a debt-free company with healthy EBITDA (earnings before interest, tax, depreciation and amortisation) margins and has been consistently profitable.

"Target fits well into Jubilant's strategy. The acquisition enables Jubilant to increase its presence in the US, which has the highest concentration of pharmaceutical and biotech companies," said Jubilant Chairman Shyam Bhartia.

Jubilant, which reported revenues of $270 million in 2004-05, would gain an established and robust business platform for the rapid development of its clinical research business, the release said.

The clinical research work of Target, which is the preferred service provider for some of the leading global pharmaceutical companies, will now spread to India. Its clients will have access to good-quality, cost-competitive data management services as well as a large number of patients, allowing them to reduce the timeline for obtaining marketing authorisation for their new drugs.

The integration of Jubilant Clinsys, the Indian CRO, with Target, is likely to increase business potential in the areas of data management and clinical research services.

This is Jubilant's fourth acquisition in the pharmaceutical sector. It first acquired Max India's API business in 2002. Last year it bought a stake of over 80 per cent in Belgian companies Psi and Psi Supply for $17 million and followed it up with the acquisition of a 65 per cent stake in US-based Trinity Labs and its subsidiary Trigen for $12.25 million.