Financial Daily from THE HINDU group of publications
Monday, Jun 20, 2005
Mergers & Acquisitions
Matrix to acquire Belgian drug firm Docpharma for $263 m
Mr N. Prasad, (right) Chairman and CEO, Matrix Laboratories, with Mr Stijn Van Rompay, COO of Belgian drug company Docpharma, in Hyderabad on Sunday. Mohammed_Yousuf
Hyderabad , June 19
IN what could be considered the largest ever acquisition executed by an Indian pharma company, Matrix Laboratories Ltd (MLL) has decided to acquire the Belgium-based $263-million pharma company Docpharma NV.
Hyderabad-based Matrix Labs had recently announced its plans to acquire Strides Arcolab Ltd to emerge as the ninth largest Indian pharmaceutical company.
The latest acquisition would enable the Matrix-Docpharma combine to leapfrog into the premier league of top-five Indian pharma majors.
MLL has signed a share purchase agreement with Docpharma promoters for acquiring 13,70,085 shares, constituting a controlling stake of around 22 per cent, at a price of 34 euros per share.
Matrix would go for a mandatory public takeover bid for acquiring the balance 78 per cent shares held by public through an all cash offer.
Announcing the details here on Sunday, the MLL Chairman and Chief Executive Officer, Mr N. Prasad, said the value of transaction amounted to US $ 263-million (Rs 1,144 crore) . After accounting for Docpharma's net cash position and its own shares held by Docpharma group, the enterprise value amounted to US $ 238-million (Rs 1,036 crore).
Aimed at demonstrating their ongoing commitment to the combined Matrix-Docpharma business strategy, the Docpharma promoters, Mr Leon Van Rompay and family, have agreed to accept a deferred payment for 65 per cent of their consideration amounting to $25.02 million (Rs 109 crore).
The Docpharma promoters would be paid 35 per cent of their consideration amounting to $13.47-million (Rs 58.6 crore) in cash on closing of transaction, Mr Prasad said.
Matrix proposes to initially finance the transaction through a combination of cash on hand and bank borrowings. It proposes to consider, if required, raising funds in the capital markets to reduce bank borrowings post-transaction.
Docpharma, a pharma sales and marketing major backed by strong portfolio of around 130 registered dossiers in the EU market, currently has presence in Belgium, Netherlands, Italy and France, the Docpharma Chief Operating Officer, Mr Stijn Van Rompay, told presspersons.
Matrix would retain Docpharma's brands and trade names in their markets. Further, Matrix and Docpharma have agreed that Mr Leon Van Rompay and Mr Stijn Van Rompay would remain and CEO and COO of Docpharma, respectively, Mr Prasad said.
"The acquisition of Docpharma accelerates our evolution as a growing force within the global generic pharmaceutical industry. This transaction allows us to gain direct access into the under-represented, high growth generic pharmaceutical markets of Belgium and Southern Europe," Mr Prasad said.
Mr Stijn Van Rompay said, "This is a strategically important step in the development of Docpharma. The combination with Matrix will create a vertically integrated player providing Docpharma with significant economies of scale and improvements in terms of product sourcing, product development and production cost and speeds up our ability to bring product to market."
Making it clear that Matrix would not go in for further acquisitions in the near future, Mr Prasad said, "For some time we prefer to focus on consolidating operations of the entities acquired so far. However, we may consider acquisition of technology-oriented small companies."
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2005, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line