Dishman Pharmaceuticals acquires Solutia´s Pharmaceutical Services

Dishman Pharmaceuticals & Chemicals Ltd has announced that it has acquired CARBOGEN AMCIS AG ("CA"), a Swiss Research based Company with the three production facilities in Switzerland for manufacture of high potent high value products from Solutia Europe SA/NV (SESA). The Company paid to SESA over US$ 75 million (inclusive of around US $ 9 million for working capital) and took over the shares and assets of CARBOGIN AMCIS, through its wholly owned subsidiary namely Dishman Pharma Solutions AG (DPS) in Brussels on August 22, 2006. Though the transfer took place on August 22, 2006, it will be from retrospective effect i.e. August 01, 2006.

The Company has taken over CARBOGEN AMCIS as debt Free Company. The entire transaction is financed through share capital contribution by the Company of US$ 22.50 million in DPS and a syndicate loan of US$ 52.50 million to DPS by ICICI Bank and Rabo International through their Singapore Branch.

The Company had reached a definitive agreement to purchase the Pharmaceutical Services business of Solutia Inc., comprised of Carbogen AG and AMCIS AG, ((CARBOGEN -AMC1S), now merged into one entity in May, 2006).

The Pharmaceutical Services business has world-class research and development facilities at three sites in Switzerland Aarau, Bubendorl, and Neuland Carbogen AMCIS differentiates itself by the quality of its technical capabilities and its integrated platform, which provides seamless solutions to the worlds leading pharmaceutical and biotechnology companies. During the year 2005, the business had a turnover of CHF 81.8 million (audited) (equivalent of around Rs 3080 Million). As a result CARBOGEN-AMCIS has developed a strong, loyal and satisfied customer base among medium-sized pharmaceutical and biopharmaceutical companies. CARBOGEN-AMCIS generated approximately 90% of revenue in 2005 from repeat customers. All intellectual property, patents and trademarks, customer contract as well as employees of the pharmaceutical Services business have been included in the transaction.

The Company will enhance the business prospects of CA by driving synergies between the two companies. Expanding the product suite and renewing the focus on key accounts will enhance the scale of operations. Jointly the Indian and Swiss businesses can serve the entire drug life cycle of 15-20 years. The Company also hopes to leverage its competency in operational efficiency in India to improve margins in the Swiss operation. This acquisition will boost the Company´s contract manufacturing business from CARBOGEN customers and the Company will now be the only Contract Manufacturing Organization in India with high potency manufacturing capability.

Source : Equity Bulls

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