Dubai based Elder Pharmaceuticals to acquire UK firm NeutraHealth Plc

Elder Pharmaceuticals will acquire NeutraHealth Plc through its wholly owned subsidiary, Elder International FZCO. The UK based NeutraHealth Plc will be bought for an estimated 9.8 million pounds, around Rs 70.60 crore. Elder Pharmaceuticals subsidiary, Elder International FZCO is based in Dubai, and the investment is meant to bolster its offering in the UK.

Elder Pharmaceuticals owns a controlling stake of 21.1 per cent in NeutraHealth and its new offer is pegged at 6.5 pence for every share for the remaining 78.9% stake. As such, the share price values the UK firm at about 12.4 million pounds. The deal will be funded by an $18 million loan from Axis Bank.

Elder Pharmaceuticals expects the acquisition to allow it gain crucial access to a variety of brands in the UK, set up a robust foothold in the regulated EU markets, and expand the firm’s product portfolio, said Elder. NeutraHealth undertakes its business in the highly fragmented vitamins, minerals and supplements industry both in the UK and Europe at large.

Currently, NeutraHealth has three group firms that include Biocare, Brunel Healthcare and Totally Nourish. The firm reported revenues of 34.6 million pounds for the financial years 2009/2010. The firm also boasts a foothold in the therapeutic industry such as women’s healthcare, wound care and pain management, nutraceuticals, anti effective and lifestyle diseases care. With six manufacturing plants located in India and an R&D center at Navi in Mumbai, Elder Pharmaceuticals has build a reputation in the Indian pharma space as one of the foremost firms in the sector.

Elder’s consolidated Income from Operations was pegged at Rs 720.89 crore in the financial year 2009/2010, with a consolidated net profit of Rs 47.22 crore. Elder Pharmaceuticals is however raising a further $50 million via qualified institutional placement that opened Friday and will end on the 21st of September, 2010. The placement’s floor price is Rs 414 per share, subsequently setting the price band for the issue at about Rs 415 and Rs 419.

A simultaneous announcement regarding the acquisition was also been made on Thursday in London under rule 2.5 of the U K city code on mergers and acquisition, the firm said.

Elder is engaged in the manufacture of a wide range of pharmaceutical product through research and development and also in the manufacturing and marketing of diverse products through licensing agreements with international pharmaceutical companies. The company is also engaged in the manufacturing of active pharmaceutical ingredients

19 Sep 2010.