India's fourth largest drugmaker by market value has agreed to divest its entire stake in its Japanese arm as it looks to pare debt.
Lupin Ltd. informed the exchanges today it has entered into a definitive agreement to sell 99.82 percent of its stake in Kyowa Pharmaceutical Industry Co. to Plutus Ltd., a subsidiary of the private equity firm Unison Capital Partners, at an enterprise value of 57,361 million Japanese yen—nearly Rs 3,702.4 crore. That, Lupin said, would generate a post-tax net cash inflow of Rs 2,103.9 crore.
Lupin had acquired majority stake in Kyowa Pharma in 2007, which contributed over 10 percent to its consolidated revenue for the year ended March.
“The deal proceeds will be utilised to strengthen Lupin's balance sheet as well as provide growth capital to support organic and inorganic initiatives for our focus markets,” Vinita Gupta, chief executive officer of Lupin, was quoted as saying in the exchange filing.
The company said the deal will be an all-cash transaction subject to terms and approvals such as those from Japan Fair Trade Commission and would be completed within the ongoing financial year. Lupin has also approved an extraordinary general meeting to seek shareholders' nod for the transaction.
Nilesh Gupta, managing director of Lupin, said: “We grew the Kyowa business multifold in the last 12 years to emerge as the fifth largest generic company in Japan.” This transaction, he said, “leverages Kyowa's strong position in CNS (central nervous system) generics, long-listed and specialty products with Unison's investments in healthcare to create a leading CNS healthcare player”.
“We're delighted to welcome Kyowa into our portfolio and support its next phase of growth, both in its existing business, as Kyowa continues to centre its strategy of strengthening its hybrid (brand/generics) pharma model in Japan, and in expanding its influence in the CNS space to beyond drugs,” Tatsuya Hayashi, founding partner of Unison Capital Partners, said.
Shares of Lupin have declined nearly 12.9 percent so far this year, compared with the Nifty Pharma Index's 12.2 percent fall.
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