Strides Arcolab shares jump 8% on acquisition of Aspen's drug assets

Strides Arcolab shares rose over 8 per cent on Thursday after the company announced that it has agreed to buy South Africa-based Aspen Pharmacare Holdings' generic drugs business in Australia for about $299.90 million.

Strides Pharma Global Pte, Singapore and Strides (Australia) Pharma Pty, Australia, wholly-owned subsidiaries of Strides Arcolab, have signed definitive agreement with wholly-owned subsidiaries of Aspen Pharmacare Holdings to acquire generic pharmaceutical business in Australia together with certain branded pharmaceutical assets.

The acquired business had sales of approximately 120 million Australian dollars in the past financial year (June 2014) with an EBITDA margin of approximately 31 per cent. The consideration for the acquisition will be approximately 380 million Australian dollars.

"The business and assets being acquired from Aspen have current prescription market share that will rank Strides and its group entities as one of the top 3 generic pharmaceutical suppliers in Australia and among the top 10 pharmaceutical companies in the Australian pharma market," the company in a filing to the Bombay Stock Exchange said.

Shares of Strides Arcolab started the day at Rs 1,097 and have touched a high and low of Rs 1,196 and Rs 1,070, respectively, so far. The scrip ended the day at Rs 1,187.90.

The transaction is expected to close by the end of the second quarter of FY16.