Strides Arcolab surged 4% to Rs 730 at 9:42 IST on BSE after the company said it has entered into an agreement with GMS Holdings to sell 25.1% stake in its biotech arm Stelis Biopharma.
The announcement was made after market hours on Monday, 29 September 2014.
Meanwhile, the S&P BSE Sensex was down 18.50 points or 0.07% at 26,578.61.
On BSE, so far 1.95 lakh shares were traded in the counter as against average daily volume of 1.24 lakh shares in the past two weeks.
The stock hit a high of Rs 748.35 and a low of Rs 718 so far during the day.
Strides Arcolab said that it has entered into an agreement with GMS Holdings (GMS) whereby GMS will invest $21.90 million for a 25.1% stake in Stelis Biopharma (Stelis), the biotech arm of Strides, to fund its Greenfield project. The transaction is expected to close in Q4 of 2014 and is subject to customary closing conditions, regulatory and corporate approvals, as may be required, Strides Arcolab said.
Strides had invested $16.9 million in Stelis to date. Strides and GMS will invest an amount of $61.9 million taking total equity investment in Stelis to $78.8 million. GMS will invest $8.5 million for a 25.1% stake in Stelis on closing, at a premium of 50% of the current equity investment by Strides. Further equity infusion of $40 million by Strides and $13.40 million by GMS to be in tranches based on project and product development needs over a period of 2 years, in proportion to their ownership at par, Strides said. Stelis also has in place, a project credit line of $40 million. With the total equity infusion of $78.8 million and credit line of $40 million, no further funding will be required till commercialization, Strides Arcolab said in a statement.
Commenting on the transaction, Joe Thomas, Chief Corporate Development Officer of Strides and Head - Biotech division stated, "We are extremely pleased to have GMS Holdings as our strategic partner for the emerging Biotech business. GMS Holdings has a track record of having partnered in successful businesses, with a strong presence in the MENA region. This partnership will accelerate our emerging market strategy for the biotech business".
Commenting on the occasion, Ghiath Sukhtian, Chairman of GMS Holdings stated "We are delighted to be partnering with Strides on this exciting venture. Strides has a long track record of building successful pharma platforms and we believe that by joining our efforts on this investment we can create significant value for both our groups."
GMS Holdings is a privately owned investment company, based in Jordan that actively manages a diversified group of assets around the world. The company's investments include businesses that operate in various sectors, including pharmaceuticals, telecommunications, specialized contracting, oil-field services, agriculture and real estate.
Strides Arcolab during market hours on Monday, 29 September 2014 said that the board of directors of the company and Shasun Pharmaceuticals (Shasun), approved a scheme of amalgamation between the two companies wherein, Shasun will amalgamate with the company in an all-stock transaction. Shasun shareholders will receive five equity shares of Strides Arcolab for every sixteen equity shares held by them in Shasun. Based on the exchange ratio, Shasun shareholders will own 26% of the combined entity. The current promoters of Shasun will, post the approval of the merger, be categorized as promoters of the combined entity, along with the existing promoters of Strides.
The combined entity to be amongst the top 15 listed Indian pharmaceutical companies by revenue with a turnover in excess of Rs 2500 crore, the statement from Strides and Shasun said. The combination creates a vertically integrated pharma company of scale with strong presence in front-ended regulated markets, finished dosages, emerging markets branded generics, institutional business, active pharmaceutical ingredients and contract research and manufacturing services, the statement said.
The scheme of amalgamation is subject to various statutory and regulatory approvals, as may be applicable.
Strides Arcolab's net profit surged 1140.7% to Rs 26.80 crore on 24.6% growth in net sales to Rs 187.95 crore in the quarter ended 30 June 2014 over the quarter ended 30 June 2013.
Strides Arcolab is a global pharmaceutical company headquartered in Bangalore. The company develops and manufactures a wide range of IP-led niche pharmaceutical products.The company has 8 manufacturing facilities presence in more than 75 countries in developed and emerging markets.
Powered by Capital Market - Live News
