Strides to increase stake to 94% in Ascent

Bangalore-headquartered pharmaceutical company, Strides Arcolab is moving to increase its stake to 94 per cent from 58 per cent in Australia-based Ascent Pharmahealth by paying A$36 million (Rs 162 crore). Ascent is a pharma-marketing company selling around 400 drugs in the Australasia region and has revenue of A$100 million.

Strides has given an offer to pay A$0.40 to the minority shareholders for this acquisition, which is at 51 per cent premium over the closing price of Ascent on December 21, 2010. “We have given an offer of $0.40 per share to minority shareholders to increase our stake to 94 per cent from present 58 per cent,” a top official from Strides Arcolab said.

Strides has acquired 50.1 per cent stake in Ascent in April, 2008 through a swap arrangement in which the company sold its Singapore subsidiary to get the holding in Ascent. Subsequently, it raised its stake to 57 per cent in the company.

“The present revised offer to minority shareholders is as per the requirement of law and this acquisition is subject to the approval of the minority shareholders along with regulatory agencies,” the official said.

About funding of present acquisition, he said that the company would fund the present acquisition through international debt which was expected to be completed by April, 2011.

Ascent Pharmaceuticals is a $100 million (Rs 450 crore) revenue company. In 2010 (Jan-Dec), Ascent Pharma expects to achieve EBITDA of $17.5-18.0 million, up by 28 per cent compared with $14 million a year ago. It sees a net profit of $11.5-12 million , up by 30 per cent compared with $9.20 million a year ago.

Strides Arcolab registered a 84.42 per cent rise in its net profit to Rs 40.74 crore for the quarter ended September 30, 2010, over the same period last financial year.

The company’s total income rose by 35.8 per cent to Rs 430.41 crore during this period as compared to Rs 319.15 crore in the same period last financial year.