Jubilant Organosys acquires Hollister-Stier of US for $122.5 million

Mumbai: Pharmaceutical research company Jubilant Organosys Ltd has bought US-based Hollister-Stier Laboratories LLC for $122.5 million (around Rs502 crore) in cash and debt.

The acquisition of Hollister-Stier, which specialises in the injectables segment will expand Jubilant''s global custom research and manufacturing services business. The acquisition will augment the Indian firm''s growth in the custom research and manufacturing service business globally and add to the company''s earnings immediately, Jubilant said in a filing with the Bombay Stock Exchange (BSE).

Jubilant would also reimburse capital expenditure incurred for capacity expansion of $16 million and certain cash capital expenditure for capacity expansion incurred by Hollister until the date of closing of the transaction.

Hollister''s capex programme is expected to be completed by the first quarter of calender year 2008 and would significantly enhance capacities and performance outlook, Jubilant said.

"It has been our strategy to rapidly expand our global CRAMS business by investing organically and acquiring entities that complement our ambition to further accelerate our growth in this area. Hollister, gives us a ready entry into contract manufacturing of injectables and presents a compelling business opportunity, especially in the US market," company chairman and managing director Shyam S Bhartia said.

"Hollister is profitable and given its strong financials, the acquisition will augment our financial performance from day one and create incremental value for all our stakeholders," he said.

Jubilant Organosys is an integrated pharmaceutical company and one of India''s largest custom research and manufacturing services (CRAMS) and drug discovery & development services companies.

Hollister is one of the leading North American immunotherapy and vaccine companies with 85 years presence and strong brand loyalty. It has a well-recognised, high quality allergy extracts and products business, which is the second largest in the USA. Hollister is also one of the three worldwide providers of stinging insect venom vaccines used to reduce a patient''s venom sensitivity. This business has consistent revenue generation that provides stable cash flows to support the high growth CMO business. The products are primarily marketed to certified allergists in USA and Canada.

The acquisition of Hollister will further increase Jubilant''s revenue and earnings contribution from pharmaceuticals and life sciences products segment and will enhance international revenues, specifically from regulated markets.

Bear, Stearns & Co. Inc. served as financial advisors to the Company in this transaction.