Glenmark Pharmaceuticals (GPL) announced on September 21 that it will sell a 75 percent stake in Glenmark Life Sciences to Nirma for an amount of 5,651 billion rupees. The share sale was valued at Rs 615 per share.
Earlier in the day, Glenmark Lifesciences closed at Rs 627.10 apiece, down 1.25 per cent.
GPL currently owns an 82.84% stake in the company.
Earlier, Moneycontrol reported that a number of private equity funds – KKR, Blackstone, BPEA EQT and PAG – had also expressed preliminary interest in buying the company. Nirma was also in the race.
Nirma finally submitted its binding offer for the participation of Glenmark Pharmaceuticals in August. The Ahmedabad-based group was looking for inorganic forays into the pharmaceutical field and acquired a 100% stake in Stericon Pharma Private Limited, a Bangalore-based contract development organization (CDMO) that manufactures sterile contact lens cleaning solutions and eye drops.
Commenting on the purchase of Glenmark Life Sciences by a non-traditional pharmaceutical group such as the Nirma Group, Chairman and Managing Director Glenn Saldanha said: “This is a big bet in the pharmaceutical sector for the Nirma Group, they have been very successful in various business areas. I’m pretty sure that they will use this as a platform to expand further.”
Glenmark Life Sciences is an active ingredient manufacturer focused on research and development (R&D) with a local presence in markets such as North America, the United Kingdom and Latin America. It delivers APIs to more than 700 pharmaceutical companies in different countries.
The Company serves chronic therapy areas such as cardiovascular diseases, diseases of the central nervous system, pain control and diabetes.
Sales and net profit in fiscal year 22-23 were 2,161 crore rupees and 466 crore rupees, respectively.
As part of the agreement, Nirma will accept a mandatory open offer to give minority shareholders the option to exit the company. After the deal and the open offer are completed, Nirma will become the new promoter of the company. Compliance with the minimum requirements for public participation is therefore the responsibility of Nirma.
GPL will retain a 7.84 per cent stake in Glenmark Life Sciences, but it is proposed that it and the other members of the company’s promoter group be classed as public shareholders.
GPL has agreed not to sell the shares it holds until (I) one year after the conclusion of the share purchase Agreement and (ii) one month after the date of Glenmark Life’s compliance with the minimum public participation requirements, whichever comes first. Science and Nirma.
Prior to the closing of the transaction, the Board of Directors of Glenmark Lifesciences may consider, approve and declare an interim dividend of Rs 22.50 per share. In this case, the sale amount is adjusted in the manner specified in the share purchase and sale agreement.
As part of the agreement, GPL has agreed to acquire active pharmaceutical ingredients (API) from Glenmark Life Sciences for a period of five financial years effective April 1, 2024. In addition, GPL and certain GPL subsidiaries will provide support services for a certain period of time. period, including in relation to business development agreements in foreign jurisdictions.