India's Wockhardt in fifth European acquisition

The Indian pharmaceutical company spends $265 million to acquire Negma Laboratories, a French research-based major with 172 patents.
Indian pharmaceutical and biotechnology company, Wockhardt, is to buy Negma Laboratories of France in an all-cash deal for $265 million that marks its fifth acquisition in Europe.

Negma is the fourth-largest independent integrated pharmaceutical group in France. For the most recent fiscal year it had sales of $150 million. Negma is a research-based company with 172 patents and leading positions in the osteoarthritis/rheumatology, phlebotonic and the arterial hypertension segments. Wockhardt intends to use the patents to extend its business to other European markets.

At the agreed price of $265 million, Negma is valued at 1.8 times sales and 9.7 times Ebitda.

The acquisition makes Wockhardt the largest Indian pharmaceutical company in Europe with more than 1,500 employees on the continent. ôWith this acquisition, we have stepped up our sales and are on the fast track to achieving $1 billion turnover by 2009,ö says Habil Khorakiwala, Wockhardt chairman.

Wockhardt achieved a turnover of $324 million for the last complete audited financial year, 2005. It has demonstrated quarter-on-quarter growth in margins and revenues on the back of both healthy growth in the domestic market and successes in international marketing. For the most recent first quarter of 2007 it grew revenue by 49% and operating profit by 68% compared to the same quarter of 2006.

Negma is WockhardtÆs fifth acquisition in Europe, after Wallis and CP Pharmaceuticals in the United Kingdom, Esparma in Germany and Pinewood Laboratories in Ireland. Including Negma, WockhardtÆs European business will now account for more than 60% of the companyÆs total revenues.

Wockhardt will finance the acquisition through a combination of the cash on its balance sheet and leverage raised against the assets of the target.

Indian shareholders are convinced of the rationale for pharmaceutical companies to go on shopping sprees abroad after seeing Dr ReddyÆs takeover of BetaPharm, RanbaxyÆs acquisition of Terapia and WockhardtÆs own earlier acquisitions all yield results. Shareholders cheered WockhardtÆs announcement pushing the shares up 4% during intra-day trading before they closed 0.5% up at Rs431 ($10.50).
¬ Haymarket Media Limited. All rights reserved.
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