Homegrown pharma company Torrent Pharmaceuticals has entered into definitive agreements to acquire 100% of Curatio Healthcare (Curatio) for ₹2,000 crore. The transaction includes ₹115 crore (on the date of signing) of cash and cash equivalents in the acquired business indicating an enterprise value of ₹1,885 crore.
Curatio is a healthcare company with a strong presence in the cosmetic dermatology segment in India, Sri Lanka, Philippines, and Nepal. It has a portfolio of over 50 brands, including Tedibar, Atogla, Spoo, B4 Nappi, and Permite, which are ranked amongst top 5 brands in their covered market.
For the financial year 2021-22, Curatio reported revenue of ₹224 crore. With YTD (year-to-date) August sales up 25%, Curatio is expected to cross ₹275 crore revenue in FY23, as per the release. Dermatology accounts for 82% of Curatio’s revenue. Within dermatology, cosmetic dermatology is a leading contributor.
“With this acquisition, Torrent Pharma will add a Field Force of 600 MRs and a distribution network of 900 stockists,” Torrent Pharma said in a BSE filing on Tuesday.
The deal is subject to conditions precedent and is expected to close within one month.
Commenting on the acquisition, Aman Mehta, Director, said, “We are delighted to enter into this deal with Curatio. The acquisition offers Torrent the opportunity to enhance its presence in dermatology with a differentiated portfolio and is a strong strategic fit.”
“Curatio has built a commendable set of high market share brands in cosmetic and pediatric dermatology that we look forward to adding to our product offerings,” he added.
Sequoia, ChrysCapital and the Promoters of Curatio, said, “Over the last fifteen years, Curatio has built a strong portfolio of differentiated products in the derma segment that are very well received by doctors and patients. We believe Torrent is best suited to further catapult the business which we have built.”
Torrent Pharmaceuticals, with annual revenue of more than ₹8,500 crore, is the flagship Company of the Torrent Group, with group revenue of more than ₹22,500 crore. As per the company, it ranked 8th in the Indian pharmaceutical market and is amongst the top 5 in the therapeutics segments of Cardiovascular (CV), Gastro Intestinal (GI), Central Nervous System (CNS), and Vitamins Minerals Nutritionals (VMN). It has 7 manufacturing facilities, of which 4 are U.S. FDA approved.
Last month, ICRA had upgraded Torrent Pharma’s long-term rating, citing its strong business position and performance in its key markets, India, Brazil and ROW, offsetting some moderation in performance witnessed in some other key markets (USA and Germany) in FY22 and Q1 FY23.
The company has debt repayment obligations of around ₹2,000 crore over FY23-FY24. However, ICRA opined that the pharma company’s strong liquidity profile would help Torrent to repay its loans. The company has internal accrual generation, unencumbered cash and cash equivalents of ₹650 crore (consolidated basis) and undrawn working capital lines of ₹1,645 crore as on June 30, 2022.
On Tuesday, Torrent Pharmaceuticals shares closed 1.38% higher at ₹1,534.75 apiece on the BSE.