India's leading drug-maker Ranbaxy on Wednesday said it has acquired Terapia, the largest independent generic company in Romania, for $324 million and aims to make that country its manufacturing hub in Europe.
The deal, which saw Ranbaxy acquiring 96.7 per cent stake in Terapia, will give the Gurgaon-based company two manufacturing units, bioequivalence centres, 60 products and access to Terapia's coverage of nearly 4,000 pharmacies and 450 hospitals in Romania.
"The deal will combine the strengths of the two premier generic companies and will allow Ranbaxy to leverage its expanded base in the rapidly growing Romanian pharmaceutical market, across the European Union and the CIS markets," CEO and managing director, Ranbaxy Laboratories Limited Malvinder Mohan Singh said.
He said Ranbaxy will be moving its European manufacturing to the two facilities of Terapia, which has the capacity to make oral and liquid formulations and steril injections.
"In future we intend to make Terapia's facilites our hub for manufacturing in Europe," Singh said, adding though the facilities are not yet USFDA approved, it will be filing an application in the near future.
He said the acquisition would help the company unleash new opportunities in Romania and pan European synergies and it will provide Terapia with additional products to launch in the domestic market at very cost competitive levels, thereby lowering costs and delivering value to both consumers and the domestic healthcare budget.
Ranbaxy's acquisition of Terapia comes at a time when the company needs to give a boost to its European presence in view of shrinking margins in the US market due to price erosion.
"This acquisition is an absolutely a good buy for us as it will give us access to one of the fastest growing markets in Eastern Europe, CIS countries. The market there has been growing at 15-20 per cent annually, and Terapia will drive our future growth," Singh said.
Terapia has 30 per cent of its product portfolio registered in over 15 countries including the high growth generic markets of Russia, Ukraine and Poland.
"Even, the cost competitiveness of Romania gives us the advantages of manufacturing in Terapia's facilities," he said.
Asked if this would be the last of Ranbaxy's acquisitions in Europe, Singh replied in the negative. "We are looking at more mergers and acquisition activities. There's a lot more to be done in Europe," he said, adding that the company is keeping its options open in the emerging markets as well.
Ranbaxy would be funding the acquisition through $400 million it had recently raised through FCCB.
"We still have some more money in the bank and that will be utilised for future acquisitions," he said, adding the acquisition of Terapia will be completed in second quarter.
Commenting on the deal, Terapia chief executive Stephen Stead said, "We welcome this move as combining the two companies commercial operations will establish a market leading position in the domestic primary care market and a superb platform for the introduction of new products."
Further investment into Terapia' s Research and Development capabilities and manufacturing facilities, will create a major regional hub for the Ranbaxy business, Stead added.
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