Money from infusion biz sale to be used for organic & inorganic growth: Claris

Ahmedabad based-co entered into a JV with Otsuka Pharma and Mitsui last week

Ahmedabad based Claris Lifesciences today said that it plans to use the proceeds from the transfer of its infusions business to the joint venture with Otsuka and Mitsui towards organic and inorganic growth especially in the speciality injectables business.

Claris had entered into a joint venture with Japan's Otsuka Pharmaceutical Factory Inc and Mitsui & Co Ltd for its infusion business in India and emerging markets. The business is valued at Rs 1,313 crore, and Claris would receive total cash consideration of Rs 1050 crore over multiple agreements, the company had informed to the Bombay Stock Exchange (BSE) on December 7.

Today the company clarified that the "entire cash of Rs 1050 crore will be received upfront on closing of the transaction, which is estimated to be around April-May 2013,  subject to regulatory and government approvals and other customary conditions."

Also, "out of the proceeds, the company expects to receive net of taxes and expenses proceeds of Rs 900 crores", a company statement here said.

Around Rs 300 crore would be earmarked for organic and inorganic growth, especially  of the specialty injectables business. Around  Rs 300 crore towards a special interim dividend or buyback of shares and the remaining Rs300 crore would be used towards pre-paying some of the company’s debt.

Claris Lifesciences is one of the largest sterile injectables pharmaceutical companies in India with a market presence across 96 countries. The company manufactures and markets products across various therapeutic segments including anesthesia, plasma volume expanders, blood products, parenteral & enteral nutrition, infusion therapy, anti-infective and renal care.