Vivimed acquires Uquifa for $55 mn

Hyderabad-based Vivimed Labs Limited has announced the acquisition of Uquifa, a bulk drug and intermediates company with manufacturing facilities in Spain and Mexico, for $55 million (around Rs 286 crore).

The acquisition has been financed by a balanced mix of debt and equity funds, according to a company release here on Thursday. The move is aimed at bringing strategic growth into its product mix and expand the footprint in Europe and America, it said.

Of the total investment consideration, $20 million (Rs 104 crore)would be paid by equity infusion and $25 million (Rs 130 crore) via debt financing while the remaining $10 million (Rs 52 crore) by way of deferred payment.

 

The target company had a net asset of $65 million (Rs 338 crore) and gross assets of $100 million (Rs 520 crore) as on June, 2011. The acquisition is EPS-accretive. Uquifa is a 75-year-old pharmaceutical company having its sales footprint in more than 70 countries.

Commenting on the acquisition, Santosh Varalwar, managing director, Vivimed Labs, said: “Multi-geographical locations spell stability and cement long-term relationship with customers and channel partners. With Uquifa, Vivimed will have a footprint into LatAm and deeper into Europe. India-facing efficiencies and Uquifa's strengths will be seamlessly aligned in the new dispensation. Uquifa’s prominent position in APIs, combined with Vivimed’s supply chain efficiencies, means enhanced competitiveness for Uquifa and sifter broadening of customer base.”

Post acquisition, Varalwar will be president of Uquifa and Mark I Robbins will remain as chief executive. Sandeep Varalwar, head of the pharmaceutical division of Vivimed Labs will also join the board of Uquifa, the release said. Uquifa operates three manufacturing sites, two in Spain and one in Mexico.

The consideration paid is a competitive multiple that would enhance the operating results and related parameters as the integration process gets completed in a time span of 18 to 24 months, according to Vivimed, which posted Rs 416 crore in total revenues for 2010-11.

The company’s scrip ended the trade at Rs 240.95 on BSE on Thursday, down 2.21 per cent over the previous close of Rs 246.40.

Sunil Arab of Srimahi Limited, a cross border mergers and acquisitions (M&A) advisory firm based in Hong Kong, provided the advisory for this deal, the company said.