AUROBINDO IN RS 135-CR DEAL FOR TISL

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CITY-BASED drugmaker Aurobindo Pharma, founded by P V Ram Prasad Reddy, is set to buy Trident Life Sciences for Rs 135 crore in an all-cash deal.

   Trident Life Sciences (TISL) is run by Ram Prasad Reddy’s son Sarat Chandra Reddy, who is also the son-in-law of Aurobindo Pharma managing director Nityananda Reddy.

   The related party transaction, cleared by the board, will give Aurobindo an opportunity to enter the injectables business as Trident Life Sciences is building a liquid injectables facility in Medak district near Hyderabad. The facility is scheduled to start operations in April 2011.

   Of the Rs 135 crore, Rs 39 crore comprises the equity component and Rs 96 crore the debt component. Aurobindo will finance the deal through internal cash flow and will repay the debt on Trident Life Sciences’ books in the next six to nine months, said a person privy to the development said.

   The acquisition is expected to enhance Aurbindos capabilities in pharma manufacturing, distribution, services and solution to its clients.

   Incorporated in 2004, TISL demerged its core Clinical Research Organisation (CRO) business into a separate company. After the demerger, TISL was left with the injectables business.

   The facility will be acquired at its book value as on June 30. It will make finished drug products such as glass vials for lyophilized sterile powder and liquids, ampoules, pre-filled syringes and blow-filled syringes.

   Independent financial Advisors KPMG India Private Limited and Motilal Oswal Investment Advisors Private Limited carried out the valuation ofassests and business ofTISL’s facility.Besides this, RB Shah Associates assessed the replacement value of the assets.

   Pharma analysts reckon it is a good deal for Aurobindo as it was not paying a premium for the acquisition. Besides, the facility will also strengthen the firm’s finished drug business as it could help bolster sales in regulated markets.

   The regulated markets of the US and Europe contributed to more than half of Aurobindo’s finished drug sales in the quarter ended June 30. 

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