Recipharm AB has completed the acquisition of a majority stake in Nitin Lifesciences Limited, an Indian sterile injectables CMO, currently owned by the Sobti family.

Recipharm has acquired 74 percent of the shares for a purchase consideration of INR 6,713 million (SEK 824 million) on a cash and debt free basis.

Thomas Eldered, CEO of Recipharm, said, “I am delighted that we have now completed this transaction. The combination of Nitin and Recipharm represents an important step in the development of both companies, and I am pleased that both Dr. Chetan Sobti and Nitin Sobti will be continuing in their current positions.”

Mr. M. M. Sobti, founder of Nitin Lifesciences Ltd., commented: “This partnership represents a real opportunity to take Nitin Lifesciences to a new level. The combination allows both organizations to access a wider customer base and to gain important learning from each other. The Sobti family is very pleased to be entering into this new strategic partnership which will be hugely beneficial for both companies.”

Highlights include:

• The combined entity will have enhanced scale, reach and profitability. Nitin Lifesciences had 2015 net sales of approximately INR 2 970 million (SEK 391 million), corresponding to 12 percent of Recipharm’s 2015 total net sales. The EBITDA margin 2015 was approximately 24 percent.
• Significantly bolsters presence in high growth developing territories and the deal firmly establishes Recipharm’s emerging market strategy. Provides excellent exposure and direct entry into the rapidly expanding Indian market.
• Recipharm’s global position in sterile injectables including lyophilization will be further strengthened.
• The implied value for 100 percent of Nitin equates to INR 9,071 million (SEK 1,114 million) and represents approximately 11.7 times 2015 EBITDA of INR 721 million (SEK 95 million).
• Accretive to organic growth and EPS.

About Nitin Lifesciences

Nitin Lifesciences Ltd is a rapidly growing Indian pharmaceutical company with a strong presence in injectable manufacturing. Established in 1994 by M. M. Sobti and the late M. V. Kakkar, Nitin has emerged as one of the largest small volume parenteral manufacturers in India and is engaged in contract manufacturing to major Indian and international pharmaceutical companies.

Headquartered at Karnal in Northern India, Nitin has three modern facilities for small volume parenterals located at Karnal (Haryana) and at Paonta Sahib (Himachal Pradesh). The newest facility in Paonta Sahib was taken into operations in 2014 and the business provides high technology pharmaceutical manufacturing solutions.

The company specializes in manufacturing liquid ampoules, liquid vials, sterile dry powder (beta lactam & non beta lactam), multi-dose eye/ear drops and lyophilized vials covering more than 200 formulations across various therapeutic areas including antibiotics, anti-malarial, NSAIDs, anti-inflammatory and local anesthetics. It brings a high quality customer base including a growing number of multinational Big Pharma customers supplying the Indian domestic market.

The company will continue to trade as Nitin Lifesciences Ltd.

In 2015 Nitin reported sales of INR 2,970 million (SEK 391 million) and an EBITDA of INR 721 million (SEK 95 million) corresponding to an EBITDA margin of 24.3 percent. The EBITDA margin has been between 19 percent and 24 percent during the last three financial years and margin is expected in the lower end of this range in the coming years. Nitin is essentially debt free.

Since 2012FY, Nitin has reported a CAGR of over 20 percent. The current capacity will continue to allow growth but at a more moderate rate.

For more information, visit www.recipharm.com.

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