Investment banking sources reveal that Shreya Lifesciences, Lupin and Dr Reddy’s Laboratories are in the race for LaborMed, which has over 80 products.
MUMBAI: Three Indian pharmaceutical companies are eyeing a slice of the lucrative Romanian market.
Investment banking sources reveal that Shreya Lifesciences, Lupin and Dr Reddy’s Laboratories are in the race for LaborMed, which has over 80 products.
Though the bidding price could not be ascertained, sources estimate the acquisition to be in the region of $100 million. None of the interested companies could be reached for comments.
LaborMed reported revenues of €12 million in the first half of 2007 and is ranked the sixth-biggest Romanian drugmaker. The company has a market share of 1.6% and has three manufacturing sites and a research lab employing over 40 scientists.
Its medicines portfolio includes 80 products registered in Romania, covering seven therapeutic areas. About 30 additional products are also authorised in several Eastern European countries. It is also touted by investment bankers as the biggest supplier of cardiovascular medicines in the Romanian domestic market.
If LaborMed is bought, it will be Indian pharma’s second acquisition in the Romanian market.
Last year in March, Ranbaxy picked up 96.7% stake in Terapia for $324 million (about Rs 1,400 crore) from buyout fund Advent International Corp. Terapia had reported revenues of $80 million in 2005.
This acquisition falls in place for Indian drugmakers who are interested in a presence in high margin emerging markets. An investment banker who did not wished to be named said: “Romania has few private pharmaceutical firms. The government tightly controlled most of the companies and the market. But now things are changing.”
The Romanian government is slowly off-loading its stake in pharmaceutical companies. “In addition to LaborMed, which is a private owned company, many government-owned firms are also on the block”, sources said.
“Indian companies view this as a huge opportunity,” a source said. Located in the Southeastern Europe, Romania has the seventh largest population among the European Union member countries.
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