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Aurobindo Pharma acquires Veritaz' domestic business for Rs 171 cr

Move marks Aurobindo's increasing focus on Indian market

Aurobindo Pharma | acquisition

Sohini Das  |  Mumbai 

Aurobindo Pharma
Aurobindo Pharma | Photo: Wikipedia

Hyderabad based drugmaker Aurobindo has acquired the domestic formulation business of another Hyderabad based firm Veritaz Healthcare on a slump sale basis at Rs 171 crore.

Aurobindo said that this marks its first step to set a footprint in the Indian domestic market. At present over 90 percent of Aurobindo's revenues come from the international markets.

Veritaz is promoted by Aurobindo promoter group. Last year Aurobindo and its promoters PV R Reddy, his wife P Suneela Rani and three other entities - Kambam P Reddy, Trident Chemphar Ltd and Veritaz Health Care Ltd — were slapped with a fine of Rs 22.7 crore by Sebi. The penalty was for charges of engaging in insider trading between July 2008 and March 2009.

K. Nithyananda Reddy, Managing Director, Aurobindo said: “I am pleased to announce the Aurobindo’s entry into the domestic market with this acquisition; with this we strongly believe that with Aurobindo’s ability to build a product portfolio, and with the existing and expanding distribution network of Veritaz we will be able to create a significant footprint in the domestic pharma market over the next few years”.

" The transaction is agreed at a consideration of Rs. 171 Crore on a debt-free cash-free basis. The transaction comes into effect from April 1, 2022 and is expected to close by May 2022. This vehicle will greatly help Aurobindo as a launch pad for marketing biosimilar and other products in India," the company said.

Veritaz has clocked a turnover of Rs 133 crore for the nine month period ended December 2021, and in FY21 it posted a turnover of Rs 127 crore. The 10-year company has around 40 brands across acute and critical care segments. The addressable market for its current product portfolio is Rs 26,775 crore.

Veritaz has a total 180 trademarks registered in its name. Its largest brands are Fepanil and Merogram group which clock a revenue of around Rs 31 crore and Rs 20 Crore up to December 2021 respectively.

Currently the company caters to anti-infective and pain-management therapeutic areas and has a pipeline of products to enter into the Cardio-Diabetic and Orthopaedic and Gynecology segments. The company has an existing sales and distribution network with 900 field force, covering more 50,000 retailers with nearly 1700 stockists, presence in 23 cities, reaching out to more than 70000 doctors and empaneled with major hospitals.

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First Published: Mon, March 28 2022. 20:58 IST