Drug Deal

Mumbai, June 25: Zydus Cadila Healthcare has signed an agreement to acquire a 100 per cent stake in Brazil-based Nikkho do Brasil Ltd for close to $26 million. The acquisition will be made through the company’s Brazilian subsidiary Zydus Healthcare Brasil Limitada.

Company sources told The Telegraph that the deal would be funded through a mix of debt and internal accruals in the ratio of 80:20.

Nikkho is the second overseas acquisition by the company this year. In April, the company acquired Japanese pharmaceutical firm Nippon Universal Pharmaceutical.

Pankaj R. Patel, chairman & managing director of Zydus Cadila Healthcare, said: “We have been looking at acquisitions that can add value to operations in our key, focused markets. The Brazilian market is reasonably large and is growing rapidly.

“With Nikkho, we gain a company with a heritage. It stands for high-quality therapeutic products and has a strong equity with the doctors. This gives us an opportunity to build our presence further in a growth-driven environment. We now see ourselves adding value to our global expansion strategy by successfully penetrating the branded generics market in Brazil.”

Nikkho, a profit-making mid-sized company based in Rio de Janeiro, manufactures therapeutic products in general medicine, paediatrics, gynaecology, neurology, gastroenterology, otolaryngology, respiratory, and dermatology.

The company posted sales of $26 million in 2006, and has a total annual production capacity of 4.99 million ampoules of both injectable and oral liquids, and 96 million units of tablets. The company currently markets 22 products under 13 different brands. It also has nearly 50 registered brands, which are yet to be launched.