Swedish firm Recipharm buys majority stake in Nitin Lifesciences for Rs 671 crore

MUMBAI: Swedish contract drug manufacturing firm Recipharm has acquired a 74% equity stake in Nitin Lifesciences, a privately held sterile injectables manufacturing firm for Rs 671 crore. The move to buy into the Indian firm will help Recipharm expand its emerging markets operations. The deal represents approximately 12.4 times EBITDA of Rs 73 crore. Recipharm said it expects to complete the deal after gaining regulatory approval from the Foreign Investment Promotion Board in the first quarter of 2016.

The latest acquisition marks the second largest inbound transaction for an injectables asset after US generic giant Mylan acquired Agila Specialties in 2013 for a total deal value of $1.6 billion. Nitin Lifesciences primarily focuses on Indian market with supplies to drug makers including Alembic, Biocon and Intas from its three manufacturing sites.

The sites that have capabilities in making small volume parenterals and there are no US FDA certification. Recipharm noted it hopes to strengthen its global position in sterile injectables including lyophilization capabilities via the latest deal.

Thomas Eldered, CEO of Recipharm said, “The Indian market is particularly attractive showing high growth levels and the transaction firmly establishes Recipharm’s emerging market strategy. Nitin can also be used as a platform for entry into other regions.

Ernst & Young India acted as the advisor to Nitin Lifesciences. Recipharm was advised by Veritas Global on the legal compliance issues.

V Krishnakumar, Partner, Transaction Advisory Services, EY said, “Among other things, this deal reinforces the long-term attractiveness of India’s domestic sterile injectable market. The Indian sterile formulations market is worth over $2 billion in revenues, and has grown at a CAGR of 12.5% over the last 5 years.”