Nicholas Piramal acquires ICI’s pharma arm for Rs 70 crore

Mumbai, January 25: | Updated: Jan 26 2002, 05:30am hrs
Nicholas Piramal India Ltd (NPIL) on Friday announced the acquisition of the entire pharmaceutical business of ICI India (ICI) for Rs 70 crore on a going concern basis. With this acquisition, NPIL emerges as the number one player (as per ORG) in the fast-growing cardio-vascular segment of the Indian pharma market, and a significant player in the critical care segment.

The acquisition, for which Enam Financial Services acted as consultants, includes ICI’s brands, manufacturing facilities at Chennai with 154 employees, the exports business and a 203-strong field force.

Ajay Piramal, chairman NPIL says that the acquisition is a perfect match for NPIL and will help it in filling up the gaps in its cardio-vascular segment portfolio. He added that there existed a large potential synergistic advantage, like field force utilisation, plant optimisation, supply chain integration and economies of scale. Globally, the pharma business of ICI was acquired by AstraZeneca. However in India, the business has been acquired by NPIL.

Paithan plant shut down
Nicholas Piramal (NPIL) has shut down its plant at Paithan in the Marathwada region of Maharashtra. The plant was acquired from Rhone Poulenc. NPIL chairman Ajay Piramal informed the press of the development while announcing the acquisition of ICI’s pharma business in India. According to NPIL executive director and chief operating officer Vijay Shah, the plant was closed down in mid-December after a successful voluntary retirement scheme (VRS). The VRS has cost NPIL Rs 3-crore, and involved 55 workers and staff.
“The acquisition is extremely significant from our analysis of the changing patterns of the pharma market. The pharma market is showing a significant shift in pattern with growth emerging from traditional segments to lifestyle products like cardio-vascular and central nervous system drug, “ Mr Piramal said.

He added that the cardio-vascular drug market in India is about Rs 1,300 crore and is growing at 21 per cent annually.”

Presenting an overview of the transaction, NPIL executive director and chief operating officer Vijay Shah said that the consideration of Rs 70-crore included payment towards acquiring net current assets of Rs 14-crore. Also, ICI would reimburse NPIL Rs one crore towards the cost of acquisition. He added that the transaction would be completed consequent to the ICI shareholders’ approval.

ICI’s pharma business, on an annualised basis, has a turnover of Rs-76 crore, and for the fiscal ’01 the turnover was Rs-69 crore. According to Mr Shah, export of specialised bulk constitutes Rs-20 crore and cardio-vascular formulations constitutes Rs-36 crore.

Major brands, which forms 44 per cent of ICI’s sales, include Tenormin, a cardio-vascular drug, with a turnover of Rs 15-crore, and Inderal (cardio-vascular) with a turnover of Rs 9- crore. Tenochlor, also a cardio-vascular drug contributes Rs 3- crore. Fluothane, an anesthesia, contributes Rs 6 crore to the turnover. The major bulk actives manufactured at ICI’s plant are atenolol, propranolol, halothane and monosulfiram.

Acquisition of ICI’s pharma business in India will now make NPIL the largest player in the cardio-vascular market with a turnover of Rs-98 crore in CVS. Cipla’s, which was the largest company ( turnover Rs 94-crore) according to ORG November ’01 survey, has now slipped into the second position and Torrent with a turnover of Rs 92 crore will be at the third position.

NPIL’s individual turnover (excluding ICI’s pharma business) in CVS is Rs- 59 crore, while that of ICI is 39-crore.

Mr Piramal said that with a young and well-trained field force of 150, the company can further strengthen its focus on CVS. He added that ICI had an attractive critical care portfolio of inhalation anesthesia, injectables and others, which have a total turnover of Rs 11-crore.

The acquisition will provide a great scope and opportunity to expand NPIL’s existing product basket, analysts said.