Sterling Biotech buys Torrent unit for Rs 55 cr

Sterling Biotech, the country's largest gelatin producer, has signed an agreement with the Gujarat-based Torrent Gujarat Biotech (TGBL) to purchase its manufacturing unit at Masar in Vadodara for Rs 55 crore in an all-cash deal.

Sterling Biotech chairman and managing director Nitin Sandesara said the company was planning to convert the penicillin G plant into a facility for manufacturing gelatin derivatives by upgrading the technology.

Incorporated in 1991, TGBL was one of the leading new-generation penicillin G producer in the country. The company had in its product portfolio the entire range of ß-lactum products such as amoxycillin trihydrate, ampicillin trihydrate and cloxacillin sodium.

Sterling is on a capacity expansion spree, both in India and abroad, to cater to the global gelatin market. The TGBL acquisition is part of the capex programme in the domestic front. Business Standard had reported on 13 October about the company's plan to expand its manufacturing capacity.

The company has recently issued foreign currency convertible bonds worth $140 million (nearly Rs 630 crore). In addition, the shareholders have passed an enabling resolution authorising the board to borrow not exceeding Rs 3,000 crore on requirement. The company plans to raise $40 million (Rs 225 crore) soon from overseas markets.

Sterling Biotech, which acquired the gelatin business of Rallis India last year for an all-cash deal of Rs 47 crore, is Asia's largest and among the top five gelatin makers in the globe.

Sources close to the company said it was close to acquiring a foreign gelatin firm shortly. The acquisition would help the company emerge as the world's second largest gelatin maker.