Piramal Healthcare Limited, one of India's largest pharmaceutical and healthcare companies, and Minrad International, Inc, a provider of generic inhalation anaesthetics, jointly announced that they have signed a definitive merger agreement for Piramal to acquire Minrad.

Under the terms of the agreement, Minrad will merge with a newly incorporated wholly-owned subsidiary of Piramal.

If the merger is completed, stockholders of Minrad will receive $0.12 per share in cash.

In connection with the merger agreement, Piramal has also agreed to acquire Minrad's 8 per cent senior secured convertible notes from the note holders.

The total consideration for the merger and acquisition of the notes, in cash plus the assumption of debt, will be approximately $40 million.

The transaction is conditioned upon approval by Minrad's stockholders and other customary closing conditions. It is not subject to any financing contingency and is expected to close in the first quarter of 2009.

UBS Investment Bank acted as exclusive financial advisor to Piramal Healthcare. 

The strategic combination will give Piramal access to key intellectual property for the manufacture of inhalation anaesthetics, including process-based intellectual property for both sevoflurane and desflurane, and will provide Piramal an immediate entry into the US market for sevoflurane, the largest selling inhalation anesthetic in the US.

Piramal is a leading producer of halothane and isoflurane, while Minrad's product portfolio of inhalation anaesthetics consists of isoflurane, enflurane and sevoflurane. In addition, Minrad has filed an Abbreviated New Drug Application (ANDA) for desflurane with the US Food and Drug Administration (FDA).
 
"The offer to Minrad is consistent with our commitment to build a serious global presence in critical care,'' said Ajay Piramal, chairman, Piramal Group. ''We respect the leading work that Minrad scientists and workforce have built over the past many years. Our dedication to building the critical care business is a reflection of our commitment to knowledge and innovation, dynamic action and care that empowers -- consistent with our Group's values."

 The boards of directors of Piramal and Minrad have approved the transaction. Certain stockholders of Minrad, holding approximately 20 per cent of Minrad's outstanding common stock, have agreed to vote for approval of the merger with Piramal.

Concurrently, with the signing of the merger agreement, Piramal provided Minrad with a senior secured loan of $12 million to provide Minrad with capital for operations during the period preceding the closing of the merger.

Upon closing of the merger, Piramal expects the transaction to be accretive to its earnings for the fiscal year ending 31 March 2010.