Vivimed Labs was locked at 5% upper circuit at Rs 106.10 at 10:41 IST on BSE after the company said it has signed an agreement to acquire Actavis Pharma Manufacturing's solid oral dosage facility in Tamil Nadu.
The announcement was made during trading hours today 1 August 2013.
Meanwhile, the S&P BSE Sensex was up 176.91 points or 0.91% at 19,522.61.
On BSE, 1.98 lakh shares were traded in the counter as against average daily volume of 9,699 shares in the past one quarter.
The stock hit a low of Rs 96 so far during the day, which is also its 52-week low for the counter. The stock had hit a 52-week high of Rs 403.65 on 10 September 2012.
The stock had underperformed the market over the past one month till 31 July 2013, sliding 60.98% compared with the Sensex's 0.26% fall. The scrip had also underperformed the market in past one quarter, declining 64.8% as against Sensex's 0.81% fall.
The small-cap company has equity capital of Rs 16.06 crore. Face value per share is Rs 10.
Vivimed Labs said that Actavis Pharma Manufacturing's (APMPL) solid oral dosage (SOD) facility is being acquired from its parent Actavis Holding Asia B. V. (Actavis), an affiliate of Actavis Inc., a leading global generic and specialty pharmaceutical company.
The gross acquisition consideration is Rs 122 crore and is being funded through an optimal combination of internal accruals and debt. The structuring is made attractive by the available cash balance and the appropriate working capital support being provided by the Actavis Group towards execution of the contract manufacturing agreement, Vivimed said. As part of the transaction, Actavis and Vivimed are also entering into a contract manufacturing agreement for Vivimed to manufacture a set of products for Actavis Group over a defined period
Commenting on the acquisition, Mr. Santosh Varalwar, MD and CEO, Vivimed Labs said, "We are pleased to announce the acquisition of APMPL's SOD facilities as a part of our overall strategy to move up the healthcare value chain. This acquisition is particulary important given it provides our finished dosage formulation manufacturing platform with a USFDA approved facility and immediate access to the regulated markets. These are also compelling forward integration synergies for Vivimed's existing API business and formulations dossier development activities. Along with the facility, we have acquired two commercially valuable and marketable ANDAs which we believe, will allow us to generate additional revenues. We are also entering into a contract manufacturing agreement with the Actavis Group for a defined period which will also be a source of revenue for us. The transaction has been structured attractively at a low net cash consideration for Vivimed".
Vivimed Labs is a leading manufacturer and exporter of specialty chemicals mainly used in the personal-care and pharmaceutical industries.
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