Aurobindo Pharma's board nods acquisition of 51% stake in GLS Pharma; stock dips ~1.5%

20 Jun 2022 , 11:43 AM

Aurobindo Pharma Limited has informed that the board of directors of the company has approved the acquisition of 51% equity shares in GLS Pharma Limited.

GLS Pharma is a company operating in the oncology business and has a manufacturing facility in Hyderabad. These products include orals and injectables used in chemotherapy for solid malignancies, chemotherapy for hematological malignancies, and chemo supportive products.

The said acquisition is for a total consideration of Rs28.05 crore.

The proposed acquisition in GLS by the Company will not fall within the definition of related party transactions.

Suresh Pathak along with his wife, Sunita Pathak, are holding 99.94% in GLS.

This acquisition is undertaken to expand the foothold of the Company in the Oncology business in the domestic market. It will further make an Inorganic addition to capacity and revenues in the oncology business.

The completion of the share transfer is estimated before July 31, 2022.

The binding agreements have been entered into between GLS Pharma Limited, its existing Shareholders, and the Company on June 17, 2022.

The transaction is proposed to be undertaken at a pre-money equity valuation of Rs45.65 crore. The acquisition is proposed through a combination of primary issuance of 2,04,819 equity shares for Rs9.35 crore to be issued by GLS. Secondary purchase through Share purchase of 4,09,339 equity shares for Rs18.70 crore from the existing shareholders of GLS.

Further, the Company has a call option to acquire the balance 49% equity shares of GLS, after a period of 3 years but before 5 years from the current acquisition, at fair value determined at such point in time.

At around 11.51 AM, Aurobindo Pharma was trading at Rs508.45 per piece, down by Rs7.1 or 1.38% from its previous closing of Rs515.55 on the BSE. The scrip opened at Rs516 and has touched intraday high and low of Rs522.30 and Rs507.30 respectively.