Lupin announced its entry into the Mexican market through its acquisition of Laboratorios Grin, a specialty ophthalmic firm. In our view, the acquisition is in line with the managements focus on geographical spread and acquiring brand presence in emerging markets.
More significantly, this strengthens Lupins capabilities in ophthalmologic therapy, towards which it has begun filing in the US recently.
The Grin acquisition follows Lupins acquisition of Nanomi BV (complex injectables) and underlines its strengthening focus on specialty segments, which is a key growth/margin driver.
Although the financials are not known yet, we believe that with Grins revenue of $28 million in CY13, the total consideration amount could have been in the range of $40-60 million (at a price/sales multiple of 1.5-2x).
Three focus areas are geographical spread (Latin America, Turkey, China); tech platforms like Nanomi BV (patents in Europe, US); and acquiring brand presence through advanced products /facilities in EMs. The deal facilitates Lupins entry in a high growth geography (market size of $13.5 billion; 9-10% growth and expected to cross $18 billion, per IMS).