PI Industries decline after terminating business transfer agreement with Ind Swift

PI Industries slumped 7.07% to Rs 2,784.55 after the company announced termination of business transfer agreement agreement with Ind Swift Laboratories and its promoters.

Earlier in July 2021, PI Industries intimated regarding its execution of a business transfer agreement with Ind Swift Laboratories (ISLL) and certain identified promoters of ISLL for the acquisition (either itself or through its affiliate) of its API business division by way of a slump sale on a going concern basis. The API business of Ind Swift Laboratories has diversified portfolio of 20+ products with a strong position in several of them along with a good R&D product pipeline.

The parties agreed that the enterprise value of the API business division on a debt free and cash free basis shall be Rs 1,530 crore (to be paid in cash). The said deal was to be executed within three months from the date of execution of the agreement, as per the company's press statement.

However, PI Industries on Monday (1 November) announced that since Ind Swift Laboratories has not been able to complete several of these pre-agreed conditions the agreement has been terminated. The consummation of the transaction was subject to fulfilment of pre-defined conditions precedents before the long stop date of 31 October 2021.

'In view of non-fulfillment and also disagreement on some of the pre-agreed conditions, the company has decided not to further pursue the aforesaid transaction,' PI Industries said in an exchange filing.

PI Industries assured that its strategy to strengthen presence in custom synthesis exports through diversification into adjacencies including pharma remains intact. The R&D establishment within PI remains attuned to developing and scaling multiple advanced technologies, processes and platforms to execute its long-term strategy. The company said it will also continue to evaluate other M&A opportunities that are aligned to it strategic direction with the intention to create a differentiated scale play in pharma.

Meanwhile, shares of Ind-Swift Laboratories were locked in an upper circuit of 10% at Rs 67.40 on BSE. Ind-Swift Laboratories manufactures bulk drugs and intermediates. The company's product portfolio includes anti-infective, anti-allergy, analgesic and cardiovascular medicines.

PI Industries manufactures agricultural and fine chemicals, and polymers.

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