Eris Lifesciences buys Strides Shasun's domestic business in Rs 500 cr deal

Enters central nervous system (CNS) segment, breaks into top 25 domestic ranking

Ahmedabad-based Eris Lifesciences has acquired the domestic formulations business of Strides Shasun in a Rs 500-crore deal, marking its foray into the fast-growing central nervous system (CNS) segment.

This is Eris Lifesciences’ fourth acquisition in 18 months and with this deal it breaks into the league of the top 25 pharma companies in India with a 1 per cent market share and annual sales of Rs 1,100 crore. On its part, Strides Shasun is exiting the domestic market as it sharpens focus on international sales. It will use the sale proceeds to repay Rs 400 crore debts.

The two companies signed an agreement on Saturday, in which Eris Lifesciences will acquire 130 Strides Shasun brands in the neurology, nutraceuticals and gastrointestinal segments, along with employees who form part of the business. Eris Lifesciences will acquire the marketing and distribution rights for the brands in India while Strides Shasun will retain the global rights for these drugs. The acquired drugs had sales of Rs 181 crore in 2016-17.

“We are entering the CNS segment with this acquisition. The market for CNS drugs in India is Rs 4,000-5,000 crore and it is growing at 10-15 per cent a year,” said Amit Bakshi, managing director, Eris Lifesciences.

He said the deal would be earnings-accretive from day one and would be funded through a mix of internal accruals and debt. Eris Lifesciences plans to transfer the production of acquired drugs to its Guwahati plant over the next 12 months.

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 Eris Lifesciences acquisitions in last 18 months

• Strides Shasun's domestic formulations for Rs 500 crore
• UTH Healthcare, a nutraceuticals maker, for Rs 12.85 crore
• 75.48 per cent stake in Kinedex Healthcare, which caters to mobility-related disorders
• Trademarks of 40 brands from Amay Pharma to strengthen portfolio in the cardiovascular and anti-diabetics therapeutic segments