Ahmedabad-based drug maker Eris Lifesciences has entered into a definitive pact with Bengaluru-Based Strides Shasun to acquire latter's India branded generics business for a cash consideration of Rs 500 crore.
"The transaction is subject to customary closing conditions and parties intend to close the transaction by November 30, 2017," the companies said in a joint statement.
Strides' India branded generics business comprises a portfolio of over 130 brands in the domains of neurology, psychiatry, nutraceuticals and Gastro, among others, it added.
"Along with the brands, the employees of Strides' India branded generics business will also become a part of Eris, but the exact numbers have to be worked out," Eris Lifesciences MD Amit Bakshi told PTI.
As per the terms of the agreement, "Eris will acquire the marketing and distribution rights for the said portfolio of products in India while Strides will retain the global rights for these products," the statement said.
Commenting on the development, Strides MD Shashank Sinha said: "This transaction is the outcome of our portfolio reprioritisation to focus more sharply on larger regulated market."
The company retains global rights for the divested portfolios, which have significant sales in Africa and will continue to grow its emerging market business, he added.
"Net proceeds from this transaction will be used to pay down debt to the tune of Rs 400 crore," Sinha said.
With this acquisition, Eris Lifesciences will be among the top ten companies in the Central Nervous System (CNS) segment, the statement said.
"The transaction is a good strategic fit for Eris and will strengthen our position in the key segments of CNS and Gastro-Intestinal therapies," Bakshi said.
Eris expects to realise cost and revenue synergies from this transaction given the company's strong presence in the branded business in India, he added.
For Strides, MAPE Advisory Group and Tatva Legal acted as the transaction advisor and legal advisor respectively, the statement said.
EY India was the exclusive M&A advisor and Shardul Amarchand Mangaldas & Co was the legal advisor to Eris Lifesciences on this transaction, it added.
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