Leading contract drug maker Jubilant Organosys on Friday announced the acquisition of Canadian speciality drug company DRAXIS Health for $255 million (around Rs 1020 crore).
The board of DRAXIS has given its unanimous approval and the transaction is expected to close in the second quarter of 2008 after the necessary shareholder and court approvals.
This is Jubilant's second major acquisition in North America, after it bought the US injectable maker Hollister for $122 million in April 2007.
The DRAXIS acquisition will help Jubilant expand its contract manufacturing business in the regulated, high-growth and high-margin area of radiopharmaceuticals and injectables.
DRAXIS has products in three categories: sterile products, non-sterile products and radiopharmaceuticals.
Commenting on the acquisition, Shyam S Bhartia, chairman and managing director and Hari S Bhartia, co-chairman and managing director, Jubilant, said, "With this acquisition, Jubilant will be among the leading providers of contract manufacturing of small volume parenterals to large pharmaceuticals and biotech companies in North America. DRAXIS has an excellent regulatory track record, with its management and employees having a wealth of experience and expertise in radiopharmaceuticals and contract manufacturing. Jubilant is committed to grow DRAXIS by supporting its management and employees through new product launches, entry into new markets and expansion of the customer base."
According to a Jubilant release, the transaction agreement contains customary non-solicitation provisions, but permits DRAXIS to terminate the arrangement and accept an unsolicited superior proposal, subject to fulfiling certain conditions.
DRAXIS has agreed to pay Jubilant a break fee of $10.5 million if the transaction is not completed. Jubilant plans to fund the acquisition through a combination of cash-on-hand and debt. The transaction is not contingent on any financing conditions.
Jubilant Organosys is an integrated pharmaceutical industry player, one of the largest custom research and manufacturing services and drug discovery and development services companies out of India.
The company has a presence across the pharmaceutical value chain for products and services such as exclusive synthesis, contract manufacturing, proprietary products, active pharmaceutical ingredients, generic dosage forms, drug discovery services, drug development services, chemistry services and clinical research services.
Jubilant has diversified its manufacturing facilities across eight locations world-wide: Gajraula (UP), Nanjangud (Karnataka), Roorkee (Uttarakhand), Nira (Maharashtra), Udaipur (Rajasthan), Samlaya (Gujrat), Salisbury in Maryland (USA) and Spokane in Washington (USA).
These facilities together help Jubilant in catering to more than 130 customers across 50 countries.
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