Laurus Labs rose 2.65% to Rs 292.60 after the company said it signed a definitive agreement to acquire a majority stake in Richcore Lifesciences.Laurus Labs has signed a definitive agreement to acquire 72.55% of Richcore's shares from Eight Roads Ventures and VenturEast for a value of Rs 246.70 crore. The current promoters of Richcore led by Subramani Ramachandrappa will continue as promoters of Richcore and will be responsible for its management and operations. Laurus Labs will fund the acquisition from its internal accruals and this acquisition will be revenue and PAT accretive.
Richcore, a fast-growing biotech company based in Bengaluru with its advanced R&D and manufacturing facilities, develops and manufactures biotech products critical for manufacturing biological drugs. Richcore also helps its global customers to develop and scale-up their bioprocesses by providing contract research, development, and manufacturing services. Richcore is currently in its growth phase and its second manufacturing plant near Bengaluru is expected to be completed by 31 March 2021. Richcore has raised early and growth stage funding from Eight Roads Ventures, VenturEast Proactive Fund and VenturEast Life Fund III.
This acquisition marks Laurus Labs' entry into the broader biologics and biotechnology segments, providing the company access to its high growth areas, globally and in India. Laurus Labs will help and drive Richcore to achieve scale and improve product offerings. With this acquisition, Laurus adds a fourth revenue stream to its three existing divisions - API, formulations and synthesis. Following the successful closure of the transaction, Richcore will be renamed to Laurus Bio.
Laurus Labs' consolidated net profit surged 328.4% to Rs 242.27 crore on a 59.9% increase in net sales to Rs 1,138.84 crore in Q2 September 2020 over Q2 September 2019.
Laurus Labs is one of the leading manufacturers of API for anti-retroviral (ARV), oncology, cardiovascular, anti-diabetics, anti-asthma, and gastroenterology.
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