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Jubilant Organosys has acquired two Belgium-based pharmaceutical companies in an all-cash deal of Rs 75 crore. Jubilant has floated a wholly-owned subsidiary in Belgium under Jubilant Pharma NV, which has acquired 80% stake each in Pharmaceutical Services Incorporated NV and PSI Supply NV.

The remaining 20% remains with the founder, Lieve Vermassen, who will continue as the CEO and managing director of the two entities. However, the structure of the board of the companies has changed post acquisition. Shyam Bhartia, chairman and managing director, Jubilant Organosys, told ET, "We have the option of picking up the rest of the stake in five years if we want." Europe is the biggest export market, accounting for 38% of exports during FY04 for Jubilant, which has been generating high margins from its international business.

The 13.5m euro deal is being funded through foreign currency convertible bond (FCCB) transactions effected last month. The FCCB was for $35m; the rest of the amount will go for brownfield expansion in the plants located at Gajraula and Mysore.

PSI is into regulatory affairs services, dossier development, formulation development and supply of finished dosage form. It has a portfolio of 19 dossiers, with three more to be filed shortly and 28 dossiers in the preparation stage.

PSI has entered into long-term supply contracts for the dossiers for generic products and has arranged market authorisation for its customers in Europe. It recorded sales of 9.6m euro (approximately Rs 53 crore) for the year ended March '04, with EBITDA expected to be 2.8m euro (approximately Rs 15.6 crore). Discounting its liabilities, PSI is sitting on cash totalling 2.2m euro.

According to a company statement on Tuesday, while the European region is an emerging market for generic products with several new patents expiring, it also has a complex regulatory compliance procedure. "This acquisition will enable Jubilant to leverage PSI's extensive knowledge of the European regulatory environment and

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