Wockhardt acquires Pinewood for $150 million, fourth European acquisition

Pharmaceutical and biotechnology major Wockhardt Limited today announced the acquisition of Pinewood Laboratories Limited, the largest and fastest growing branded generic pharmaceutical company in Ireland. The all-cash deal was worth $150 million on an enterprise value basis. Pinewood reported sales of over $ 70 million for the year ended June 2006.

"This acquisition gives us a larger footprint in Europe spread over UK, Ireland and Germany," Wockhardt chairman Habil Khorakiwala said. "European business will now exceed $200 million, accounting for almost half of Wockhardt's total sales."

It is understood that apart from Wockhardt, Teva, Barr, and Actavis were also in race to buy Pinewood, though Wockhardt was not among the early suitors for the Irish company. However, Wockhardt's offer for Pinewood surpassed all others in a final round of bids in early September.

For the last two years, Wockhardt has been making futile attempts to acquire companies. It had bid unsuccessfully for Terapia, Betapharm, but ultimately lost out. The last acquisition that it had made was in 2004, when it acquired a company in Germany. The acquisition gives Wockhardt an entry and leadership in the fast genericising market of Ireland. As almost half of Pinewood's sales come from the UK, the acquisition will reinforce Wockhardt's position in the UK where it is already the largest generic company from India and the second largest player in hospital sales.
"The acquisition offers us enormous opportunities to unlock value of our enlarged customer base in UK and Ireland by offering them a wider range of products," Khorakiwala said.

The acquisition is a strategic fit for Wockhardt UK as Pinewood's liquids and creams business complements Wockhardt UK's strengths in injectable and solid dosages.

Wockhardt UK is amongst the top 10 generic companies and is the market leader in several of its injectable and solid products in the UK. Wockhardt UK can now leverage Pinewood's marketing and distribution system and its customer base in Ireland for its vast range of hospital products.

Pinewood is Wockhardt's fourth European acquisition, after Wallis, CP Pharmaceuticals (both in UK) and Esparma in Germany. UK and Germany are Europe's leading generic markets.

Established in 1976, Pinewood is a highly regarded and recognised company in Ireland with over 200 prescription and over-the-counter products. It is the market leader in renal therapy products and has a strong brand name in many of its market segments. The company has an exciting portfolio of products at various stages of development.

Pinewood reported a compounded annual growth rate (CAGR) of 20 per cent for the last five years with EBITDA margin of over 20 per cent.

One of the most open economies of the world, Ireland has enjoyed considerable growth over the last 15 years. Nicknamed 'Celtic Tiger' for its rapid growth in the '90s, the Irish economy grew at almost 9 per cent per annum between 1996-2000. Its per capita GDP, which stood at 63 per cent of UK's GDP in late 80s rose to 115 per cent of UK's per capita GDP by 2003. This rapid growth of the economy was facilitated by investment-friendly policies of the government and the tax rates, which are amongst the lowest in the world.

Wockhardt Limited, with global headquarters in Mumbai , India, is a technology-driven pharmaceutical and biotechnology company with an active multi-disciplinary research programme, with more than 100 patents filed in current year. Its new drug discovery programme has yielded several promising molecules, one of which is now in Phase II human clinical trials. Wockhardt, listed on Indian stock exchanges, has a market capitalisation of over $1 billion.