)
French drug maker Sanofi SA is close to acquiring city-based Elder Pharmaceuticals, valuing the pharmaceuticals company at about Rs 2,200 crore. The transaction is expected to be closed in the next few weeks, said a banker close to the development.
The Indian company’s recent default on interest payments of Rs 10 crore to debenture holders had expedited the talks for the sale, said a banker, on condition of anonymity. Its liabilities were close to the deal size and the company’s bankers were pushing for the deal so that it could repay the loans, the banker added.
When contacted, an Elder Pharma spokesperson declined to comment. A Sanofi spokesperson, too, refused to comment on what he termed “market speculation”. (DEAL STREET)
Bankers say Sanofi has sent details of the deal and legal agreements to Elder Pharma and the Indian company is now vetting the legal papers.
While the sale will give the promoters of the Indian company an opportunity to cash out, it will help Sanofi deepen its penetration into the $13-billion Indian pharmaceuticals market. Sanofi earned a third of its revenues from emerging markets, including India, and was looking for acquisition opportunities in emerging markets, its chief executive Chris Viehbacher had told reporters here on September 30 this year.
| Elder Pharmaceuticals | Shareholding Pattern |
| As on September | |
| in % holding | |
| Total of Promoter | 34.12 |
| Non Promoter (Institution) | |
| Foreign Institutional Investors | 16.71 |
| Insurance Companies | 2.57 |
| Others | 3.24 |
| Non Promoter (Non-Institution) | |
| Bodies Corporate | 15.98 |
| Foreign Corporate Bodies | 12.75 |
| Others | 14.63 |
| Total | 100.00 |
According to data provided by Elder Pharma to stock exchanges, the company’s revenue for 2012-13 stood at Rs 1,233 crore, while its profit stood at Rs 93 crore. For the quarter ended June this year, revenue stood at Rs 189 crore, while the company recorded a profit of just Rs 6.78 crore.
Promoters hold 34.12 per cent stake in the company and 99 per cent of this is pledged with banks.
Sanofi’s acquisition of Elder Pharma would be second big-ticket acquisition in the pharmaceuticals sector this year. In February this year, US-based Mylan Inc had acquired Bangalore based Agila Specialities, a subsidiary of Strides Arcolab, for $1.6 billion in cash.
Set up in 1988 with a manufacturing plant in Navi Mumbai, Elder Pharma now has significant presence in the women’s healthcare, lifestyle diseases and pain management segments, with six plants across India. Its best-selling brand, Shelcal (a calcium supplement), is one of the leading brands in the Indian pharmaceuticals space. The company derives more than 90 per cent of its revenue from the domestic market.
| Rs Crore | Quarter Ended | |
| Elder Pharmaceuticals | Sep-13 | Jun-13 |
| Net Sales | 152.97 | 187.93 |
| Other Operating Income | 0.49 | 1.32 |
| Total Income | 153.47 | 189.25 |
| Total Expenses | 120.28 | 138.83 |
| Interest | 33.63 | 43.65 |
| Deprecations | 7.42 | 7.33 |
| Tax | 0.97 | 0.00 |
| Net Profit | 3.85 | 6.78 |
| Source: Capitaline | ||
| Compiled by BS Research Bureau | ||
