India's Wockhardt buys French drug-maker for 265 million dollars

May 3, 2007, 11:27 GMT

New Delhi - India's leading drug-maker Wockhardt Ltd Thursday announced that it has acquired French pharmaceutical group Negma Laboratories for 265 million dollars in an all-cash deal to expand its presence in Europe.

Negma is the fourth largest integrated pharmaceutical group in France with sales of 150 million dollars.

'It (Negma) is a research-based pharmaceutical company with 172 patents. The acquisition will allow Wockhardt to extend this patented portfolio to other European markets where it enjoys a strong presence,' Wockhardt Chairman Habil Khorakiwala said.

The transaction is valued at 1.8 times the sales and 9.7 times the EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of the French company.

With this acquisition, Wockhardt said it would emerge as the largest Indian pharmaceutical company in Europe with more than 1,500 employees based in the continent and the European business would now account for more than 60 per cent of its total revenues.

'The acquisition would provide us the right entry vehicle to enter the French generics market valued at two billion dollars, leveraging Wockhardt's robust EU portfolio and impressive pipeline,' Khorakiwala said.

Negma is Wockhardt's fifth acquisition in Europe after Wallis, CP Pharmaceuticals both in UK, Esparma in Germany and Pinewood Laboratories in Ireland.

Growing at the rate of more than 10 per cent every year, the Indian pharmaceutical industry is keenly eyeing Europe to set up a distribution network.

Among the biggest such acquisitions, India's second-largest drug-maker, Dr Reddy's Laboratories, acquired Germany's Betapharm Group for 570 million dollars in 2006.

With the Negma acquisition, Wockhardt would now have four manufacturing facilities in Europe producing bulk drugs, injectables, tablets, capsules and creams.

'Wockhardt will now enjoy a pan-European presence, covering all the key markets of Europe - Germany, UK, Ireland and now France,' Khorakiwala added.