Herbal and nutritional products maker Plethico Pharmaceuticals is picking up around 20% stake in a UAE-based pharma retail chain with operations in the CIS region for around $20-22 million. If the deal goes through, it will be also the first overseas acquisition by an Indian company in the pharma retail space.
While the details of the deal are not known, industry sources say the Indian company has been in talks with several retail chains and finally zeroed down on a privately-held firm which has around 300-350 stores across the CIS countries. This will help Plethico to sell its over 1,000 products directly across almost all the CIS countries.
When contacted, a Plethico Pharmaceuticals spokesperson said: “We don’t comment on market speculations.” However, sources say that a formal announcement to this effect may be done soon. A mid-sized pharma company, Plethico, is in the niche business of nutrachemical and herbal business. It has been fast expanding through the inorganic route. If this deal goes through, it will the Indian company’s second acquisition this year. In January, the Mumbai-based company acquired US’ branded nutritional products maker Natrol for $81 million. Last year, it also acquired the UK-based sports nutrition company.
Sources say the Indian company currently markets a range of allopathic, herbal, nutritional and sports nutrition products in the CIS region. The company markets its drug in almost all the CIS countries through both its own marketing and distribution firm Rezlou, (acquired in 2004) and through tie-up with other domestic distribution firms. However, industry analysts say if the Mumbai-based company sells its product through its own retail network it will help the company to reduce the cash recovery period significantly.
The company is expecting its sales to touch Rs 1,000 crore (consolidated sales) this year. For the quarter ended September 30, the company reported sales of Rs 154 crore.
Source: Economic Times