Strides Arcolab surges after pact to acquire generic pharmaceutical business of Aspen

Strides Arcolab jumped 5% to Rs 1,148.95 at 14:21 IST on BSE after the firm said it has entered into agreements to acquire a generic pharmaceutical business in Australia and related assets from Aspen for approximately 380 million Australian dollars.

Meanwhile, the S&P BSE Sensex was down 34.44 points or 0.12% at 27,802.77.

On BSE, so far 2.04 lakh shares were traded in the counter as against average daily volume of 1.03 lakh shares in the past one quarter.

The stock hit a high of Rs 1,171 and a low of Rs 1,070 so far during the day. The stock had hit a record high of Rs 1,249 on 8 April 2015. The stock had hit a 52-week low of Rs 495 on 26 May 2014.

The stock had underperformed the market over the past one month till 20 May 2015, declining 2.32% compared with Sensex's 0.18% fall. The scrip had, however, outperformed the market in past one quarter, advancing 19.14% as against Sensex's 4.77% fall.

The mid-cap company has equity capital of Rs 59.62 crore. Face value per share is Rs 10.

Strides Arcolab said that Strides Pharma Global Pte, Singapore and Strides (Australia) Pharma Pty, Australia, both wholly owned subsidiaries of Strides Arcolab have signed definitive agreements with certain wholly owned subsidiaries of Aspen Pharmacare Holdings (Aspen), a company listed on the Johannesburg Stock Exchange, to acquire a generic pharmaceutical business in Australia together with certain branded pharmaceutical assets. The consideration for the acquisition will be approximately 380 million Australian dollars, Strides said in a statement.

The acquisition of the business will include access to the product pipeline that was under development by Aspen and includes a number of major product launches in the next six months, Strides said in a statement. The transactions will be financed by a combination of internal accruals and debt financing. It will be EPS accretive immediately, Strides said. The transactions are expected to close by the end of Q2 FY 2016 subject to customary closing conditions and regulatory approvals, Strides said.

Strides Arcolab's net profit fell 97.2% to Rs 97.40 crore on 3.3% decline in net sales to Rs 232.43 crore in Q3 December 2014 over Q3 December 2013. The company unveils its Q4 March 2015 results on 22 May 2015.

Strides Arcolab is a global pharmaceutical company headquartered in Bangalore. The company develops and manufactures a wide range of IP-led niche pharmaceutical products.

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