Mumbai, June 7: The Bangalore-based Strides Arcolab, one of the largestIndian exporters of branded generic pharmaceutical products, is evaluatingthe option of bringing in Bombay Drugs and Pharma within its fold. The twocompanies are already working on a strategic alliance in areas likemanagement and marketing. The proposed merger, if it fructifies, will markthe Rs 166 crore Strides Arcolab's fourth major deal in the last fewmonths.Strides had earlier merged Plama Laboratories and Remed Laboratories withitself and had gone on to acquire a soft gelatin capsule manufacturing unitin New Jersey, USA. The US unit operates as a 100 per cent subsidiary.Industry analysts say that there is tremendous synergy between theMumbai-based Bombay Drugs and Pharma and Stride Arcolab's operations, giventhe former's process development strengths. Details on the managementset-up, stage at which the discussions are etc could, however, not beascertained.
The Bombay Drugs and Pharma scrip has not witnessed significant activity inthe recent past and closed at Rs 15.60 on Wednesday on the BSE. StridesArcolab, which is traded on the National Stock Exchange and the ISE has beenmoving in the region of Rs 235 on the BSE.
Bombay Drugs and Pharma has broad-based its government approved research anddevelopment facilities at Tarapur and Panoli and has process developmentalliances with a host of international companies. Bombay Drugs and Pharmahad also been associated with the erstwhile Plama Laboratories, broadly inthe area of specialty chemicals. The Mumbai-based company registered salesof Rs 19.38 crore and a net profit of Rs 93.17 lakh during 1998-99.
Strides Arcolab, on the other hand, has a state-of-the-art soft gelatincapsules plant at Jigani near Bangalore with an installed capacity of about1.7 billion capsules per annum. This is set to go up to 2.3 billion capsulesby 2000-01.
The facility has just received the approval of the Therapeutic GoodsAdministration of Australia, opening up a window of oppportunity for theBangalore-based company. The company claims that its ISO 9001 certified softgelatin plant is among the largest and most sophisticated plants in Asia.Strides is also among the largest suppliers to key institutionally fundedaid projects and had reportedly caught the fancy of Morgan Stanley AssetManagement (MSAM) which picked up roughly nine per cent equity in thecompany at Rs 300 per share. Shroders Capital Partners also holds asubstantial stake in the company, though the exact quantum could not beascertained.
Strides Arcolab registered a total income of Rs 165.7 crore for the yearended March 31, 2000, registering an increase of 52 per cent over theprevious year. Operating profits jumped 78 per cent to Rs 44.7 crore duringthe year.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.