Reckitt Benckiser to buy Paras Pharma:
In what could be billed as the second biggest pharma takeover bid this year, Reckitt Benckiser, the world’s biggest maker of household cleaners, has agreed to buy the Indian ointments and personal care firm Paras Pharma for Rs 3,260 crore ($ 724 million).
Paras, an Ahmedabad- based privately- held firm, makes BoroSoft moisturising skin cream and Zatak deodorant, non-prescription (or over- the- counter) medications like Moov – pain relief ointment, Krack – heel care lotion and D’Cold – cold remedy.
It also makes prickly heat powder, Dermicool, and Itch Guard & Ring Guard anti- fungal creams, besides hair gel and deodorant products branded Set Wet.
Reckitt is well known for its products Dettol, antiseptic liquid and soaps, besides Veet, hair remover, Strepsils, throat lozenges, and Mortein, pest control aerosol sprays and mosquito repellents. The firm is said to have piped Glaxo- SmithKline Plc, Sanofi- Aventis, Novartis AG and Johnson & Johnson, which all had submitted concrete bids to acquire majority stake in Paras.
This deal comes within seven months of Abbott Laboratories Inc’s $3.7- billion deal (over Rs 15,000 crore) in May for the branded generic drugs operations of India’s Piramal Healthcare, highlighting rising foreign interest in Indian pharma companies.
Reckitt would acquire a 63 per cent stake in Paras from Actis LLP. Sequoia Capital and the remaining Paras shareholders, including that of the company’s founder, Girish Patel and his family, would also sell their stakes to the UKheadquartered company.
An analyst who did not wish to be named said that the price was a bit on the higher side at 8.2 times revenues and 30.7 times EBITDA (earnings before interest, tax, depreciation and amortisation).
Paras clocked about Rs 400 crore of sales last fiscal.
Developing markets, which include India, Latin America, Africa, Middle East and Asia, account for about a fifth of Reckitt’s revenue. The group has been investing in the fastgrowing non- prescription pharma segment over the last four years, buying Boots’ over- the- counter business in 2006, the USbased Adams cough medicines company in 2008 and earlier this year the SSL Durex condoms group.
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