Laurus Labs Ltd. (Laurus BSE: 540222, NSE: Lauruslabs, ISIN: INE947Q01028) has signed a definitive agreement to acquire a majority stake in Richcore Lifesciences Pvt Ltd (Richcore). Richcore, a fast-growing biotech company based in Bengaluru with its advanced R&D and manufacturing facilities, develops and manufactures biotech products critical for manufacturing biological drugs. Richcore also helps its global customers to develop and scale-up their bioprocesses by providing contract research, development, and manufacturing services.
This acquisition marks Laurus Labs' entry into the broader biologics and biotechnology segments, providing the company access to its high growth areas, globally and in India. Laurus Labs will help and drive Richcore to achieve scale and improve product offerings. With this acquisition, Laurus adds a fourth revenue stream to its three existing divisions - API, Formulations and Synthesis. Following the successful closure of the transaction, Richcore will be renamed to Laurus Bio Pvt Ltd.
Richcore has large scale fermentation capabilities and manufactures animal origin free (AOF) recombinant products. These products help vaccine, insulin, stem-cell based regenerative medicine and other biopharma companies eliminate dependency on animal and human blood derived products and in turn produce safer medicines. Richcore is currently in its growth phase and its second manufacturing plant near Bengaluru is expected to be completed by 31 March 2021. Richcore has raised early and growth stage funding from Eight Roads Ventures, VenturEast Proactive Fund and VenturEast Life Fund III.
Laurus Labs has signed a definitive agreement to acquire 72.55% of Richcore's shares from Eight Roads Ventures and VenturEast for a value of Rs. 246.7 crores. The current promoters of Richcore led by Mr. Subramani Ramachandrappa will continue as promoters of Richcore and will be responsible for its management and operations. Laurus Labs will fund the acquisition from its internal accruals and this acquisition will be revenue and PAT accretive.
Commenting on the development, CEO of Laurus Labs Dr. Satyanarayana Chava said, "we are very excited on this acquisition, as this gives us entry into high barrier biotechnology segment. Laurus Labs will bring scale to Richcore' s operations and can become a major player in the biotech CDMO space . This will also help Laurus in becoming a leader in biocatalysis as Richcore brings significant expertise in enzyme development for pharmaceutical and other industrial applications."
Subramani Ramchandrappa, Chairman & Managing Director, Richcore Lifesciences said, "Richcore and Laurus Labs coming together marks the convergence of Biotechnology and Chemistry faculties. Leveraging the synergies arising from Laurus's experience and Richcore's innovation, we plan to build scale as we continue to serve our existing customers and enter new biotech segments. We welcome Laurus Labs on board and thank our customers and team members for their continued patronage and trust in our shared vision. We also thank our existing investors Eight Roads Ventures and VenturEast for their support since our inception."
Dr. Prem Pavoor, Partner & Head of India, Eight Roads Ventures said: "We are very excited and proud to see two of our partner companies come together to create the beginnings of a global lifesciences leader. There has been a distinct upsurge in demand for biologics and vaccine manufacturing as well as a move away from animal-derived biologic products over the past few years, and now accelerated by the Covid-19 pandemic. Richcore's capabilities in biologic development and manufacturing are synergistic with Laurus' track record of building global leadership and world-class manufacturing scale in important therapeutic categories. The combination of Dr. Satya and Subbu's leadership will definitely create a strong biopharmaceuticals development and manufacturing organisation."
Dr. Siddhartha Das, General Partner, VenturEast said: "Richcore is an innovation driven Biotechnology Company charting an exciting journey into new technologies with the potential to revolutionize areas of human health, food security and sustainability. The strategic partnership with Laurus Labs will create a strong platform for both innovation and rapid scaling."
Sarath Naru, Managing Partner, VenturEast, said: "Richcore's Leadership has shown the tenacity and vision to create a high barrier complex "Animal Origin Free" category in the biotech space. We backed the founder and his team early on from the first round until the latest Series C round. We are extremely proud to have backed this pioneering team in a category that will grow multifold in the coming decade."
Shares of Laurus Labs Ltd was last trading in BSE at Rs.285.05 as compared to the previous close of Rs. 289.75. The total number of shares traded during the day was 191513 in over 6743 trades.
The stock hit an intraday high of Rs. 292.3 and intraday low of 282.05. The net turnover during the day was Rs. 54797399.