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Strides Strides To Take Over Majority Stake Of Bafna’s India Branded Generics Business

Team Industry 2.0
July 22, 2014

The transaction will strengthen Strides Arcolab’s reach to newer markets with a wider portfolio of products.

Arcolab Limited (Strides) has entered into an agreement with Bafna Pharmaceuticals Limited to acquire majority stake of their India Branded Generics Business for a cash consideration of Rs. 481 Million. The transaction is expected to close by end of September 2014, and is subject to customary closing conditions and statutory approvals.



Raricap, the flagship brand of Bafna, is the eighth largest in oral haematinic segment in India with eight SKUs in oral and liquid forms with an annual revenue of Rs. 200 Million. Raricap was acquired by Bafna from Johnson & Johnson in the year 2011 – and has grown at CAGR of ~ 64 per cent in last three years.



Transaction structure

• The India Branded Generics Business of Bafna is valued (Enterprise value) at Rs. 650 Million

• The Business in its entirety will be transferred to an SPV, in which Strides will hold 74 per cent

• Strides to pay a consideration of Rs. 481 Million in cash to Bafna and balance as 26 per cent equity participation in the SPV

• The IPs and manpower will be transferred to the SPV as part of the business transfer

• Bafna will continue to manufacture these products for the SPV

• The SPV will have global rights for Raricap brand Strategic Rationale

• Strengthen the Women & Child care portfolio of Strides’ branded generics business

• Bafna’s pan India reach to aid Strides’ biggest brand Renerve’s entry in new market segments

• Strides’s strong South India Presence to help Raricap reach a higher patient base



Commenting on the development, Arun Kumar, Founder and Group CEO of Strides Arcolab Limited 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.”



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