Strides Arcolab buys stake in Bafna's branded generics biz for Rs 48 cr

Strides Arcolab Ltd has entered into an agreement to buy majority stake in Bafna Pharmaceuticals Ltd’s India Branded Generics Business for a cash consideration of Rs 48.1 crore. Transaction is expected to close by end of September 2014. Bafna’s India Branded Generics Business is engaged in sales and marketing of branded pharmaceuticals products in niche therapeutic segments of haematinic, women healthcare, paediatric care in India and includes the flagship brand Raricap and 7 other brands. The business 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.
 
Pursuant to the transaction, Bafna Pharmaceuticals will transfer 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 crore and 26% equity in a SPV, 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.
 
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.”
 
Arun Kumar, Founder and Group CEO, Strides Arcolab Ltd, stated, “This acquisition provides necessary impetus to our domestic branded generics business and the transaction is in line with our strategy to grow the company’s branded business. The transaction will strengthen our reach to newer markets with a wider portfolio of products.”