Granules India to buy Auctus and says Singapore closure is a 'non-event'
The proposed acquisition – financial terms of which were not disclosed – will add Auctus’ plant in Vishakhapatnam – which makes a portfolio of 12 APIs Granules does not currently produce - and its intermediates facility in Hyderabad to Granules’ network.
News of the deal comes just days after Granules posted a healthy set of quarterly financials and hinted that it may ass manufacturing capacity to try and further expand its API business in the US and Europe.
The proposed takeover – which is due to close in the next six months - fits with this aim according to Granules spokesman Vijay Ramanavarapu, who told in-Pharmatechnologist.com around 60% of Auctus’ business comes from the US and Europe.
He added that that – in addition to being approved by the US FDA, EDQM, Health Canada, the KFDA and the WHO – Auctus has the “written confirmations” of quality needed to ship APIs to Europe.
This year Granules expects Auctus’ API and intermediates businesses to generate revenue of between $20m and $25m according to Ramanavarapu, who added that: “We will be taking on the Auctus team since the team is primarily operations based.”
Announcement of the proposed takeover coincided with the opening of a 10,000 sqft R&D site in Hyderabad that will focus on generic API development and bolster existing capacity at Granules facility in Pune.
Singapore closure
News of the proposed takeover and the new R&D centre comes hot on the heels of Granules announcement on the Bombay Stock Exchange (BSE) that it will close its Singapore subsidiary – Granules Singapore PTE Ltd.
The closure plan was widely reported in the Indian press, however, according to Ramanavarapu, the decision to shut down the subsidiary is about simplifying Granules’ corporate structure rather than cost cutting.
He said that: “The closing of Granules Singapore is a non-event,” explaining that the subsidiary was a “shell company” the firm opened several years ago to access foreign-currency loans when India was going through a credit crunch.
“We never utilized Granules Singapore and to make life easier, we closed the subsidiary. There is no material impact on our operations.”
