Dr Reddy's Laboratories share price rises 2.6% on OTC brands acquisition outside the US: : Among key Nifty-50 gainers
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Reddy’s Laboratories SA, Switzerland, a wholly owned subsidiary of the Company, will acquire all of the quotas of Northstar Switzerland SARL (“Northstar Switzerland") incorporated in Switzerland, a Haleon group company.The Four brands being acquired which include global leader Nicotinell had sales of GBP217 million for CY23. The acquisition being made by Dr.
Reddy’s Laboratories SA is on an upfront cash consideration of GBP 458 million and additional performance-based contingent cash payments of up to GBP 42 million in Calendar year 2025 and Calendar Year 2026, said Dr Reddy's in its release.Since the Nicotinell had sales of GBP 217 million for CY23 and is being acquired for around GBP 500 million and hence this translates into acquisition is being made at 2.3 times sales, and around 9 times Enterprise Value to Ebitda as per Jefferies India Ltd.Also Read- Budget 2024: FPI flows may remain volatile in the near-term; to catch pace post the event and Q1 resultsOn the positive side the acquired four brands in the Nicotine Replacement Therapy space are recommended by the ‘WHO Model List of Essential Medicines’ for nicotine use disorders. Also the brands are marketed in about 31 nations.
Around 80% of revenues in CY 2023, came from top 12 nations whcih include the UK, France, Sweden, Denmark, Finland, Norway, Australia, New Zealand, Canada, Japan, Germany, and the Netherlands.On the flip side, the product portfolio being acquired has had almost stagnant revenues of approximately GBP 217 million, GBP 200 million and GBP 201 million in CY 2023, CY 2022 and CY 2021, respectively. The same will require upfront investments said analysts.
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