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Analysts estimate the deal to be worth $100 million.
Bankers describe Lupin’s acquisitions strategy as a string of pearls. Medquímica is its third acquisition in about a year and half. Last year, Lupin had bought Mexican firm Laboratorios Grin and Nanomi in Holland.
All three acquisitions were reportedly so small that Lupin did not disclose their sizes.
But this could change soon. The company has increased its focus on inorganic growth and is eyeing product and technology platforms, as well as access to new markets.
“The spotlight this financial year is on mergers And acquisitions (M&As). You can expect more,” says Nilesh Gupta, the 41-year-old managing director of Lupin.
Investors love the company promoted by billionaire Desh Bandhu Gupta. Lupin’s share price climbed 114 per cent in 2014-15. Its revenue has grown to Rs 12,599 crore in 2014-15, up from Rs 4,773 crore in 2009-10.
“In M&As, we have been very light, but that is changing,” says Gupta, who plans to buy speciality drug companies in the US, Europe, and Japan.
"When a company goes in for a large transformational acquisition, both the upside and the downside are huge," says Manisha Girotra, chief executive at global investment bank Moelis & Company in India. "Lupin follows a strategy of small acquisitions. The strategy has suited it well," she adds.
Lupin said a quarter of its $5-billion revenue in 2017-18 could come from acquisitions. The company is debt-free and has a net worth of Rs 8,800 crore.
“Given the strength of the balance sheet, the firm is open to small and large acquisitions, to be funded via internal accruals or borrowing,” says Aarthisundari Jayakumar, analyst at Elara Capital.
