Recipharm has announced that it has now concluded the acquisition of Kemwell’s pharmaceutical businesses located in Bengaluru, India
The acquisition expands the company's position in emerging markets significantly, taking sales in these markets to more than SEK 800m, dominated by sales directly to the fast-growing pharma market in India.
It will also bring major extension of Recipharm’s capabilities in India. This has the following advantages:
The change further strengthens Recipharm’s synergistic business model by aligning Indian development and technology operations with the combined Company’s manufacturing capabilities in India and Europe. In addition, there are potential commercial synergies from enhanced customer offering and cross selling.
Pro-forma net sales for the businesses for the calendar year 2016 amounted to INR 2 263 million, an increase of 5% in spite of fourth quarter sales being temporarily negatively affected by India’s demonetisation scheme.
The acquisition price for the businesses in India amounts to INR 7 980 million (SEK 1,058m on a cash and debt free basis.
As part of the transaction Recipharm also has a right of first negotiation to acquire Kemwell’s Indian biopharma business, which is not included in the transaction and will continue to be retained by the sellers.
The acquired business, now known as Recipharm Pharmaservices, was originally founded by Subhash Bagaria. It employs around 1,200 people and comprises both development services as well as commercial manufacturing of solid, semi-solid, liquid and topical products, with customer relations spanning decades.
The solid dosage plant was commissioned in 2008 and has approvals from US FDA and EU amongst many other regulatory bodies. The oral liquids production plant was commissioned in 2011 and is specialised in automated high throughput large volume manufacturing, mainly for the Indian subcontinent.
The development business is a rapidly growing business with a comprehensive service offering including formulation development, small scale manufacturing for clinical trials and a large analytical services business.