Piramal Enterprises looks to buy OTC business of Morepen Laboratories

Ajay Piramal Group flagship Piramal Enterprises is in talks with Morepen Laboratories to buy its OTC (over-the-counter) business, which include some market leading brands such as Burnol.

New Delhi-based Morepen Laboratories is considering a business rejig which could lead to a potential sale of the over-the-counter brands.

Morepen is looking to monetise some of its mainstream brands when larger rivals look to expand their consumer product portfolio.

The company's OTC portfolio include Lemolate cold and cough relief remedy, Sat-Isabgol, anti-fungal and antibacterial cream Itch Beat, Fever-X, Pain-X, a face wash and 2 Cool hair oil, among other brands.

Besides Piramal Healthcare, Cipla and Zydus Cadila are also reported to be among the potential suitors.

However, Piramal Enterprises is hopeful of clinching a deal as the talks have advanced and are closer to a deal now. Once a deal is struck, the transaction could be concluded within the next few months, say sources.

Morepen has mandated Deloitte Touche Tohmatsu to run a formal process and negotiations are at an advanced stage, reports quoting sources said.

Piramal Enterprises, which has been looking for acquisitions in the branded OTC products segment, acquired four brands from US drug maker Pfizer for Rs110 crore in May, its third such acquisition.

Earlier, the company had acquired five OTC products of MSD Pharmaceuticals in the pain relief category for Rs 95 crore, in December 2015. It had bought the brand Little, which sells various baby accessories across India, a month earlier.

Morepen has a major presence in the wellness category with a spectrum of popular OTC products such as Burnol, Lemolate and Sat Isabgol.

Burnol and Lemolate had recorded growth of 80 per cent and 57 per cent respectively in their first quarterly sales in FY 2016-17.

Total sales from OTC products went up by 61 per cent to Rs11.92 crore in Q1 FY 2016-17 against Rs7.40 crore in Q1 FY 2015-16.

"Our aim is to be a significant player in every business under the healthcare vertical of Piramal Enterprises Limited," said Nandini Piramal, executive director, Piramal Enterprises, while acquiring Pfizer brands in December.

"The consumer products division of the company currently ranks 7th in India, but we aim to be a top three player in the OTC market by 2020. Acquisition is one of the important routes to help us achieve our goal," she said.