New Delhi, July 24 -- Indian pharmaceutical company Natco Pharma Ltd has decided to acquire a 35.75% stake in South Africa's Adcock Ingram Holdings Ltd for about Rs 2,000 crore, or almost $226 million, to expand its presence in the African market.
The Hyderabad-based drugmaker will also set up a subsidiary in the region, Natco Pharma South Africa Proprietary Ltd, with an initial investment of Rs 2,100 crore, the company said in a statement.
Adcock Ingram is a 135-year-old pharmaceutical company that manufactures prescription and over-the-counter generic and branded formulations. It also manufactures home care products.
Natco said it will buy about 51.64 million Adcock shares at a price of 75.00 South African rand ($4.27) apiece, totaling ZAR4 billion ($226 million). The all-cash transaction will be completed by December 2025, Natco said.
Johannesburg Stock Exchange-listed Bidvest Group Ltd will retain a 64.25% stake in Adcock, Natco said.
Adcock Ingram posted revenue of about $536 million for the year through June 2024 and $262 million for the first half of FY25. Its EBITDA was $78 million for FY24 and $38 million for the six months ended December 2024. The transaction values Adcock at a revenue multiple of 1.12x and an enterprise value-to-EBITDA multiple of 7.83x, Natco said.
Adcock was established in 1890 as a pharmacy in Krugersdorp, South Africa and evolved to be one of the biggest pharmaceutical and healthcare companies on the African continent. It is the second-largest South Africa-based pharmaceutical company in terms of private market share. Adcock owns three manufacturing facilities near Johannesburg and 49% of an Indian JV that runs two manufacturing facilities in India.
Natco has a presence across the globe, including in the US, Canada, Brazil, the Philippines, Singapore, Australia, Indonesia and the Middle East. The company reported consolidated revenue of Rs 4,429.5 crore for 2024-25, compared with Rs 3,998.8 crore in 2023-24. Profit after tax jumped to Rs 1,883.4 crore in 2024-25 from Rs 1,388.3 crore.
The transaction is subject to approval from the Reserve Bank of India and South African authorities.
Published by HT Digital Content Services with permission from VC Circle.