Piramal eyes Ind-Swift facilities in Rs 1k-cr deal

Company is always looking at acquisitions: Swati Piramal

The deal street is abuzz with talk of another transaction in the pharma space. Mumbai-based Piramal Healthcare is in talks with the Chandigarh-headquartered Ind-Swift Laboratories to acquire its contract research and manufacturing business and many of its facilities approved by the US Food and Drugs Administration (US FDA), sources say.

The deal, under negotiation, is valued at Rs 1,000-1,200 crore, at least two persons close to the development have told Business Standard.

“I cannot comment on market speculation,” said Piramal Healthcare Vice-Chairperson Swati Piramal. However, she said the company was “always looking at acquisitions”.

Many from the Piramal top management are on a visit to Ind-Swift’s facilities, it is learnt. When contacted, Ind-Swift Laboratories Vice-Chairman and Managing Director N R Munjal refused to comment.

The deal is expected to lift Piramal’s contract research and manufacturing services (CRAMS) and active pharmaceutical ingredient (API) manufacturing business, which constitutes a majority of its operations in the pharma segment after the company sold its domestic formulations business to Abbott Laboratories in 2010 for Rs 17,000 crore. Piramal’s CRAMS division, known as Pharma Solutions, provides services across the drug life cycle — from development to commercial manufacturing and off-patent supplies of APIs. In financial year 2011, Pharma Solutions reported revenues of Rs 1,020 crore. Ind-Swift Laboratories is well placed in both emerging and developed markets.

According to its website, Ind-Swift Laboratories is a $250-million (Rs 1,375 crore) company with a commercial manufacturing facility at Dera Bassi, Punjab, which has regulatory approvals from various countries, including the US. Besides, the company also has 18 other manufacturing blocks and a fully equipped pilot plant. The company, established in 1995, is listed on stock exchanges in Mumbai and Luxembourg.

In the past too, Piramal Healthcare had evaluated options to buy Ind-Swift’s CRAMS business and US FDA-approved units, a source said.

Shares of Piramal Healthcare on Monday closed at Rs 457.15 each on the Bombay Stock Exchange, down 6.4 per cent from the previous close. Ind-Swift Laboratories shares ended at Rs 51.25 apiece, up 13.8 per cent.