South African pharmaceutical company Adcock Ingram has sold its Indian unit, Cosme Farma Laboratories, for a sum of R336 million ($22 million). The sale comes after the Bangalore-based business suffered two write downs over the past three years. Adcock Ingram said in a statement:
"The Indian pharmaceutical marketing and selling business does not meet the company's current investment criteria and as a result the company has decided to exit this business."
Adcock bought Cosme Farma Laboratories in 2013 for R822 million, but had to write down its value by R278 million in 2014 and by a further R74.4 million during 2015. According to Adcock, significant additional investment was needed to successfully compete in India's pharmaceutical market.
A PE firm, Samara Capital Partners Fund, has been identified as the buyer, and the cash sale will include Adcock Healthcare, a manufacturer and distributor of pharmaceuticals in India, which runs Cosme Farma Laboratories.
The Indian unit posted a net profit of R2.1 million in the six months to end-December, also reporting net assets worth R701.3 million during the period.
The sale is subject to approval by India's Foreign Investment Promotion Board.
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