Plethico to take 20 per cent stake in CIS drug maker

Herbal and neutraceutical product manufacturer Plethico Pharmaceuticals Ltd will acquire a 20 per cent stake in Sputnik Regional Aptika Holdings Ltd, a pharmaceutical firm based in the Commonwealth of Independent States, for around $20 million.

Plethico will acquire stake in the Sputnik Regional Aptika Holdings, a subsidiary of Hong Kong-based drug retailer Tricon Holdings, in an all-cash deal, the company said in a release.

The companies will also enter into a long-term manufacturing contract as part of the deal. "With this deal, we also anticipate a long-term manufacturing contract from Tricon, especially in the pharmaceutical formulations where we have extra capacity in our Indian manufacturing plants," Plethico chief financial officer Sanjai Pai said.

''This acquisition would help Plethico consolidate its position in the CIS market. CIS is largely a credit hungry market and the only real cash business in CIS is retail pharmacy and hence our long standing desire of owning a share in CIS retail pharmacy has been fulfilled," Chirag Patel, CEO and director of Plethico Pharma, said.

Sputnik has 300 retail outlets in the CIS and generated revenues of about $120 million in 2007. Plethico hopes to have revenues of Rs1, 000 crore by 2010.

Plethico expects the CIS region, where drugs and lifestyle products market is expected to grow at 30-32 per cent, to be a major contributor to its revenues.

The acquisition will also help the company extent its market to Russia and Ukraine and the other key markets like Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Moldova, Tajikistan and Uzbekistan.

Tricon Holdings is a leading pharma retail company with sourcing base in the UAE.