Strides raises $21.9 mn for biotech biz from Jordanian GMS Holdings

Funds from Jordan-based GMS Holdings to fund its greenfield project

Strides Arcolab, the Bangalore-based mid-sized publicly-held pharmaceutical company, has said that it has entered into an agreement with GMS Holdings. Jordan-based GMS will invest $21.90 million for a 25.1 per cent stake in Stelis Biopharma, the biotech arm of Strides, to fund its greenfield project.

The transaction is expected to close in Q4 of 2014 and is subject to customary closing conditions, regulatory and corporate approvals, as may be required.

According to a statement from Strides, it has so far invested $16.9 million in Stelis to date, and Strides and GMS will invest $61.9 million, taking the total equity investment in Stelis to $78.8 million.  GMS will invest $8.5 million for a 25.1 per cent stake in Stelis on closing, at a premium of 50 per cent of the present equity investment by Strides.

Further equity infusion of $40 million by Strides and $13.40 million by GMS to be in tranches based on the project and product development needs over a period of two years, in proportion to their ownership on a par. Stelis also has in place a project credit line of $40 million.

Commenting on the transaction, Joe Thomas, Chief Corporate Development Officer of Strides and Head – Biotech division, stated: “We are extremely pleased to have GMS Holdings as our strategic partner for the emerging biotech business.  GMS Holdings has a track record of having partnered in successful businesses, with a strong presence in the MENA (Middle East and North Africa) region. This partnership will accelerate our emerging market strategy for the biotech business.”

Commenting on the occasion, Ghiath Sukhtian, Chairman of GMS Holdings, stated: “We are delighted to be partnering Strides on this exciting venture. Strides has a long track record of building pharma platforms and we believe that by joining our efforts on this investment we can create value for both our groups.”