Pharmaceutical company Granules India Ltd on Monday said it has agreed to buy Auctus Pharma Ltd, a manufacturer of active pharmaceutical ingredient (APIs) or bulk drugs, for Rs.120 crore in an all-cash deal. The acquisition will be funded through the companys internal accruals and debt.
The acquisition process is expected to be completed in three to six months, the company said.
Auctus has two manufacturing facilities—an intermediate facility in Hyderabad and an API facility in Visakhapatnam that has approvals from leading regulatory agencies, including the US Food and Drug Administration and the World Health Organization. The company made a turnover of Rs.140 crore in 2012-13.
Granules manufactures APIs like painkiller drug paracetamol, anti-diabetic drug metformin, anti-inflammatory drug ibuprofen and respiratory drug guaifenesin, and made a revenue of Rs.784.4 crore in the year to 31 March.
The acquisition will give Granules access to Auctus product portfolio that includes 12 APIs and intermediates of those APIs in several therapeutic categories such as in the treatment of allergies, hypertension and seizures. Auctus currently sells its APIs and intermediates to customers in 50 countries.
The acquisition of Auctus fits into our strategy of being a fully integrated manufacturer while diversifying our product portfolio by adding high-value products with significant market demand, said Krishna Prasad, managing director of Granules. Auctus provides Granules with a meaningful API platform with a USFDA-approved site to strengthen our finished dosage division.
The team and assets from the acquisition will initially operate as a separate division within Granules.
Granules, which is growing its revenue at 35-40% annually, expects to be a Rs.1,000 crore company in revenue terms by the end of this financial year.
Prasad said Granules is focusing on adding new products with higher margins. The company has formed a joint venture with Belgian chemical producer Ajinomoto OmniChem to manufacture active pharmaceutical ingredients and intermediates for other companies.
The joint venture, Granules-Omnichem Pvt. Ltd, will construct a $20 million production facility at the Pharmacity in Visakhapatnam, where it will start contract manufacturing.
Granules also announced the opening of a 10,000 sq.ft. research and development (R&D) facility in Hyderabad.
The new R&D will focus on full scale generic API development and will supplement the companys existing R&D facility in Pune which currently focuses on sustainable technology development, the company said in a statement.

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