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Chennai-based Bafna Pharmaceuticals Ltd said that it has entered into a definitive agreement to sell its majority stake in the India Branded Generics business to Strides Acrolab Ltd for a cash consideration of Rs 48.1 crore. It may be noted that this include Bafna's flagship brand Raricap, a haemoglobin drug which it acquired from NR Jet Enterprises, an affiliate of Johnson & Johnson during 2011.
According to the announcement of Bafna, Bafna will transfer the entire India Branded Generics Business as a going concern on a slump sale basis to Strides and will receive a cash consideration of Rs 48.1 and 26% equity in a Special Puspose Vehicle, where Strides will hold 74%. Under the proposed transaction, Bafna will continue to manufacture and supply the products from its existing manufacturing facilities for a period of five years, it said.
The India Branded Generics Business of Bafna consists of sales and marketing of branded pharmaceuticals products in niche
therapeutic segments of Haematinic, women healthcare, pediatric care in India and includes Raricap and seven other brands. It has presence in 17 states in India with a field force of about 400 people and had revenue of Rs 24.6 crore for the financial year ended March 31, 2014.
Commenting on the sales of business, Mahaveer Bafna, chairman and managing director said, "This transaction helps Bafna de-leverage its balance-sheet and demonstrates our commitment to maximising value to our shareholders. Brand Raricap has legacy of over four decades and has significant growth potential. Bafna will have 26% equity shareholding in the Business and with strides proven track record of value creation it is expected to reap huge benefits in future."
The transaction was approved by the Board and is subject to approval of shareholder's approval and customary closing
conditions. It is expecting to close the transaction by end of September 2014. KPMG Corporate Finance acted as an exclusive financial advisor and Desai & Diwanji acted as legal advisor to Bafna Pharmaceuticals Limited for this transaction, it added.
