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2. Dr. Reddys Labs acquires Betapharm for $ 560mn. Mumbai. In what is seen as India Incs first major M&A in pharma sector, DRL acquired 100% stake in Germany based Betapharm for $560mn. The stockclosed a whopping 9.3 % up on the news. 3. - The Acquirer
4. -The Target
5. Valuations
6. 7. The Goodies
8. Financing of the deal
9. Stock jumps on acquisition news correction in prices BSE Code - 500124Face value - Rs. 5.00 Promoter holding- 26.40% 52 week H/L 739 (16 June 08)/ 387 (18 Nov 08) 10. Break -Up 11. Claimed Synergies from the Acquisition
12. A Risky Acquisition?
13. A Risky Acquisition?
14. Present Scenario
Acquisitions contributed Rs3.9b (20% of sales) with Betapharmcontributing Rs2.6b and Mexico acquisition Rs1.4b. New launches seem to have helpedBetapharm improve its performance compared to that in 1Q wherein it was impacted due to price cuts and stock adjustments. Overall gross margins (GPM) were at 41% compared to 51% for 2QFY06. We believe that authorized generics and the Mexico acquisition have pulled down overall margins as the companys core business enjoys about 50-53% GPM. We believe that authorized generics would be enjoying GPM of only 20%.BetapharmGPM has improved to 58% (53% in 1Q) while API GPM has also improved to 41% contributing positively to overall GPM 15.
Message From The Chairman 16. Sources 17. GET WELL SOON