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Time of India
6 days ago
- Business
- Time of India
Natco Pharma shares dip over 2% after Rs 2,000-crore stake buy in South Africa's Adcock Ingram
Natco Pharma shares slipped 2.5% to Rs 1,009 apiece on the BSE in Thursday's trade after the company announced its plan to acquire a 35.75% stake in South Africa-based Adcock Ingram Holdings (AIHL) for $226 million (approximately Rs 2,000 crore). The proposed all-cash deal involves acquiring nearly 36% of AIHL from minority shareholders. Natco said the strategic investment aims to expand its geographical footprint in South Africa , marking a significant step toward diversifying beyond its key markets. Founded in 1890, Adcock Ingram operates across four segments—prescription, consumer health, over-the-counter (OTC), and hospital products—with a wide portfolio of branded and generic formulations, critical-care products, and consumer healthcare offerings. The acquisition is expected to be completed in 2025. Following the deal, Adcock will continue as a private South African entity, with Bidvest retaining 64.25% and Natco holding 35.75%, including its existing 0.80% stake. Post-transaction, Natco will consolidate its share of AIHL's net profits, which stood at $45 million for the year ended June 2024, on total revenue of $536 million. 'Adcock Ingram is a respected pharmaceutical company with well-recognised brands and a leading position in South Africa. This acquisition gives Natco an established entry into the Southern African market, opens new revenue streams, and strengthens our footprint in a key emerging region,' said Rajeev Nannapaneni, CEO and Vice-Chairman of Natco Pharma. Live Events In addition to the acquisition, Natco's board approved the incorporation of a wholly owned subsidiary in South Africa with an investment of up to Rs 2,100 crore this year. The move is part of the company's strategy to enter new geographies for sustained growth and improved profitability. The board also approved a proposal to liquidate its wholly owned subsidiary Time Cap Overseas (TCOL) and directly hold the investment in step-down subsidiary NatcoFarma do Brasil. Brokerage View Brokerage firm Nuvama raised its target price on Natco Pharma to Rs 1,110 from Rs 990, while maintaining a 'Hold' rating. It believes the Adcock deal strengthens Natco's presence in emerging markets, supports diversification beyond the US, and improves R&D leverage. The deal is expected to be 7–9% EPS accretive, driven by prescription revenue synergies. Also read: The great Adani bet: Mutual funds & LIC are buying what GQG, FIIs are selling Nuvama also noted that with Rs 15 billion in post-deal cash, Natco may pursue further M&A opportunities to fuel long-term growth. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Economic Times
6 days ago
- Business
- Economic Times
Natco Pharma to buy over 35% in South Africa's Adcock Ingram
Synopsis Natco Pharma, based in Hyderabad, is set to acquire a 35.75% stake in Adcock Ingram, South Africa's second-largest drugmaker, for ₹2,000 crore. This all-cash deal provides Natco Pharma with a strong entry into high-growth African markets and expands its product offerings. The acquisition, expected to finalize in four months, aligns with Natco's strategy to grow in emerging markets. Representative image. Mumbai: Hyderabad-based Natco Pharma on Wednesday said it has agreed to buy a 35.75% stake in Adcock Ingram, South Africa's second-largest drugmaker, for '2,000 crore. The all-cash deal will give Natco Pharma a foothold in some high-growth African markets besides an opportunity to expand its product portfolio. Rajeev Nannapaneni, chief executive officer and vice chairman of Natco Pharma, told ET that the Adcock deal is aligned with the company's plan of expanding its presence in emerging markets. "Besides, this was within our valuation range," he said the company reserves the right of first refusal in case the shareholders of Adcock Ingram plan to divest additional equity stake. The Bidwest group holds 64.25% stake in the company. "Adcock Ingram will be delisted from the JSE (Johannesburg Stock Exchange) if the transaction proceeds," Natco Pharma said in a statement, adding that the estimated transaction completion time is four months, assuming that there are no regulatory delays. Nannapaneni told investors over a call that the deal is a significant step as it would have taken Natco Pharma decades to build business in Africa on its own. Adcock Ingram has a presence across segments-prescription, OTC (over-the-counter drugs), consumer products and the hospitals business. For the first half of FY25, Adcock Ingram recorded sales of $262 million. In FY24, its sales stood at $536 million and EBITDA at $78 million. It had a gross margin of 33.4% in EV/EBITDA for the Natco deal is 7.83, according to an investor presentation by Natco Pharma said it can potentially bring significant value through its research and development programmes, dossier approvals, intellectual property sharing, experience in regulated market operations, sourcing and global marketing for the new markets in Africa and regulated markets in the the investor call, Nannapaneni hinted at another deal under examination but refused to share any details. For FY25, Natco Pharma recorded sales of '4,784 crore and a profit after tax of '1,883 crore. The company had a cash reserve of '3,000 crore, of which '2,000 crore will be used for the Adcock deal.
The Hindu
6 days ago
- Business
- The Hindu
Natco Pharma to acquire stake in South African firm Adcock Ingram for ₹2,000 crore
Natco Pharma has made an offer to acquire nearly 36% stake in South African pharmaceutical company Adcock Ingram Holdings (AIHL) for $226 million (around ₹2,000 crore). The proposal to acquire the stake from minority shareholders in an all cash deal is a strategic investment aimed at to expanding geographic footprint in South Africa, Natco said on Wednesday. Founded in 1890, AIHL has a diverse product portfolio, from generic and branded formulations, critical-care hospital products to consumer and home-care products. It operates across four segments -prescription, consumer, OTC and hospitals. The acquisition is expected to be completed by 2025. Post-acquisition, AIHL will continue to operate as a private South African business with Bidvest holding 64.25% and Natco 35.75%, including a prior held 0.80% stake, in the company. Post-transaction, Natco will consolidate 35.75% of AIHL net profits in its financial results. AIHL clocked revenue of $536 million in the financial year June 2024 and profit after tax of $45 million. 'Adcock Ingram is a respectable pharmaceutical company with well-recognised brands and products and maintains a leading position in the South African pharmaceutical market. The proposed transaction will provide Natco Pharma with a well-established entry into the Southern African market. It will also allow us to tap into new revenue streams and expand our footprint in one of the largest and growing emerging markets, while providing a gateway to the African continent,' CEO and Vice-Chairman Rajeev Nannapaneni said. Besides the acquisition, Natco Pharma Board also approved a proposal to incorporate a wholly owned subsidiary in South Africa with an investment of up to Rs.2,100 crore by this year to enter new geographies for growth and increased profitability. It also approved a proposal to liquidate wholly owned subsidiary Time Cap Overseas (TCOL), and directly hold the investment in step down subsidiary NatcoFarma do Brasil. Natco shares closed 2.01% higher at ₹1,034.75 apiece on the BSE.
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Business Standard
6 days ago
- Business
- Business Standard
Natco Pharma to acquire 35.75% stake in Adcock Ingram for ₹2,000 cr
The proposed Rs 2,000 crore deal will give Natco Pharma a strategic foothold in South Africa, with transaction completion expected within four months subject to approvals Sanket Koul New Delhi In a bid to enter the African market, Natco Pharma on Wednesday announced that it has submitted a firm intention for a ZAR 4 billion (Rs 2,000 crore) cash offer to acquire a minority stake in South Africa-based drugmaker Adcock Ingram Holdings (AIHL). If approved, the Hyderabad-based company will hold a 35.75 per cent stake in Adcock Ingram by offering ZAR 75.00 ($4.271) per share to minority stakeholders. The deal gives Natco a gateway into South Africa, with AIHL holding a 10 per cent share of the private pharmaceutical market in the country. It is also the largest supplier of hospital and critical care products in South Africa. This transaction would consolidate Natco's existing 0.80 per cent stake, making it the second-largest shareholder in AIHL, behind the Bidvest Group, which holds the remaining 64.25 per cent. 'Post-transaction, Natco will consolidate 35.75 per cent of AIHL's net profits in Natco's financial results in accordance with its shareholding,' the company said in a regulatory filing. If the deal proceeds, Adcock Ingram will be delisted from the Johannesburg Stock Exchange (JSE) and will continue to operate as a private South African business. Rajeev Nannapaneni, chief executive officer and vice-chairman of Natco Pharma, said the proposed acquisition would help the company tap into new revenue streams and expand its presence in one of the largest and fastest-growing emerging markets. In return, AIHL is expected to leverage Natco's research and development capabilities, regulatory expertise, and global marketing network to support local leadership and expansion into new markets. 'AIHL will benefit from a partnership with a research-focused, innovative, and vertically integrated pharmaceutical company, and over time, South Africans will be beneficiaries of wider access to affordable medicines,' said Andrew Hall, chief executive officer, AIHL. Valued at an estimated ZAR 11 billion ($632 million), AIHL generated revenues of ZAR 9.6 billion ($536 million) for the financial year ending June 2024. Founded in 1890, the company operates across four segments—prescription, consumer, over-the-counter (OTC), and hospitals. It has a diverse product portfolio ranging from generic and branded formulations to critical-care hospital products, as well as consumer and home-care products. The announcement was made after market hours. On Wednesday, Natco Pharma's shares rose by 2.01 per cent, ending the day's trade at Rs 1,034.75 apiece on the Bombay Stock Exchange (BSE).
Time of India
6 days ago
- Business
- Time of India
Natco Pharma offers to acquire nearly 36% stake in Adcock Ingram in Rs 2,100-cr deal
Natco Pharma on Wednesday said it has offered to acquire nearly 36 per cent stake in South African drug firm Adcock Ingram Holdings for up to Rs 2,100 crore in a cash deal. The Hyderabad-based firm said it has submitted a firm intention offer to Adcock Ingram Holdings to buy out minority shareholders for a cash offer of R75 (USD 4.271) per share. Explore courses from Top Institutes in Please select course: Select a Course Category Artificial Intelligence Leadership Public Policy others Healthcare Degree Data Science Data Analytics Others MCA healthcare Design Thinking CXO Technology Operations Management PGDM MBA Management Finance Product Management Project Management Data Science Digital Marketing Cybersecurity Skills you'll gain: Duration: 7 Months S P Jain Institute of Management and Research CERT-SPJIMR Exec Cert Prog in AI for Biz India Starts on undefined Get Details Should the offer be accepted, the company will hold a 35.75 per cent stake in Adcock Ingram, valued at R4 billion (USD 226 million), it stated in a regulatory filing. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Struggling With Belly Fat? Try This at Home Home Fitness Hack Shop Now Undo The acquisition amounts to 51,643,319 equity shares resulting in Natco shareholding to arrive at 35.75 per cent of the paid-up equity share capital in aggregate, it said. Adcock Ingram is estimated at a valuation of R11 billion (USD 632 million). Live Events It is envisaged that post-acquisition, Adcock will continue to operate as a private South African business, supported by two substantial strategic shareholders, Bidvest at 64.25 per cent and Natco at 35.75 per cent, including a prior held stake, the company stated. Natco currently holds 0.80 per cent in Adcock Ingram. "The proposed transaction will provide NATCO Pharma with a well-established entry into the Southern African market. It will also allow NATCO Pharma to tap into new revenue streams and expand our footprint in one of the largest and growing emerging markets , while providing a gateway to the African continent," Natco Pharma CEO & Vice Chairman Rajeev Nannapaneni said. Adcock Ingram generated a revenue of R9.6 billion (USD 536 million) in the last financial year and delivered a gross margin of 33.4 per cent. "This is a significant moment in our company's long history. This offer represents a huge vote of confidence in Adcock Ingram's people, brands and business model, and the South African healthcare environment," Andrew Hall, CEO, Adcock Ingram Holdings, stated. Adcock Ingram will benefit from a partnership with a research-focused, innovative and vertically integrated pharmaceutical company, and over time South Africans will be beneficiaries of wider access to affordable medicines , he added. In addition, the offer represents an attractive premium for the minority shareholders, who have supported company over the years, he said. The estimated transaction completion time is four months, assuming no regulatory delays, Natco Pharma said. Business operations will remain uninterrupted, with no changes to existing partnerships, joint ventures, or supplier relationships, it noted. Natco Pharma shares ended 1.99 per cent up at Rs 1,034.50 apiece on BSE.
