Nirma to buy majority stake in Glenmark Life Sciences

Glenmark Pharmaceuticals will sell 75% stake in its subsidiary Glenmark Life Sciences to Nirma Limited, for Rs 5652 crore, at a price of INR 615 per share, stated a company press release.

Glenmark Pharma will own 7.84% in GLS after the divestment.

Nirma Group, Ahmedabad based detergents to cement conglomerate, is the front-runner to buy out Glenmark Life Sciences (GLS), an 82.84 per cent subsidiary of Glenmark Life Sciences, ET first reported on July 31.

Nirma is using their healthcare subsidiary Aculife Healthcare Ltd as the likely vehicle for the acquisition, ET reported.

The transaction is subject to customary closing conditions precedent, including receipt of regulatory and shareholder approvals, added the release.

Pursuant to the transaction, Nirma Limited will make a mandatory open offer to all public shareholders of GLS.The other contender Sekhmet Pharmaventures, a platform backed by, PAG, CX Partners and Samara Capital, did not put in their final offer after intense negotiations, ET reported.Nirma ventured into life sciences when it acquired the ailing injectables business of Core Parenterals from its lenders in 2006-2007.

Founded by Karsanbhai Patel, the Ahmedabad-headquartered conglomerate started off with the sale of washing powder under the Nirma brand. It has been expanding from mere detergent manufacturers to other sectors like Pharma, chemicals and cement through multiple acquisitions.

Nirma had acquired Lafarge Holcim’s cement assets in India for Rs9000 crore in 2016 and Emami Cements for Rs5500 crore in 2020. In the pharma sector, AcuLife recently acquired Stericon Pharma, a Bangalore-based contract development manufacturing organisation (CDMO) manufacturing sterile contact lens cleaning solutions and eye drops.

Aculife Healthcare Pvt Ltd, part of the group, sells medical devices and critical care medicines under the Nirlife and Oneuse brands.

Aculife manufactures large and small volume infusions (in closed system) and bags, ophthalmics, respules, liquid and gaseous anesthesia, range of electrolytes special solution, range of parenteral nutrition and general injectables.

GLS posted a 2% growth in revenue of Rs2,161 crore in FY23 from 2,123 crore in FY22. Net profit went up to Rs467 crore from Rs418 crore, a growth of 11%.

CVS, CNS and pain management portfolio continues to deliver a steady growth while GLS’ key focused area of chronic therapies contributed 65% of the net sales on a full year basis, said the company presentation.

On a full year basis, the regulated market contributed 78% of the total portfolio in FY23 compared to 72% in FY22. It has a total cumulative DMF/CEPs filings of 468 as on 31 March, 2023.

The Glenmark Pharmaceuticals Ltd business is the largest revenue contributor to GLS, at roughly around 32% for the full year. External business (ex-Glenmark Pharma) continues to see strong momentum growing 19% YoY driven by regulated markets, said company presentation.