Strides to exit its investment in Arrow for AUD 394 mn

Deepthi | Myequity news | Date : 29-01-2019 15:10:00 IST

Strides Pharma Global Pte, Limited, has approved the sale of its entire Australian business (Including Arrow). The transaction will be subject to shareholder approval of Strides and completion of the merger of Arrow and Apotex Australia.

Strides re-entered the Australian market in September 2015 as Arrow through the acquisition of generics portfolio from Aspen Pharmacare Holdings Limited (Aspen). In May 2018, Arrow and Apotex Inc. (Apotex) announced their intention to merge their businesses in Australia to become the largest player in the Australian generic pharmaceutical market both by volume and revenue.

Deal Structure

Strides will sell its complete stake in Arrow to entities owned and operated by Dennis Bastas, Executive Chairman and Co-founder of Arrow. Arrow will merge with Apotex to create the new entity – Arrotex. Strides will retain Portfolio IP and will enter into a ten-year preferred supply agreement with Arrotex.

Strides to receive AUD 394 mn while Arrotex will pay-out AUD 39 mn minority interest. Strides will receive AUD 300 mn as upfront payment at the closure of transaction while the balance AUD 94 mn to be deferred through a secured instrument.

Use of Proceeds

The initial net proceeds of AUD 300 mn (US$ 213 mn) along with additional US$ 42 mn released from the general claims escrow account on Agila transaction will be deployed to:

Pare US$ 150-160 mn of term debt of Strides which will strengthen balance sheet.

Infuse US$ 90-100 mn as growth capital for other operating markets of Strides.

The transaction remains subject to the successful completion of the Arrow/Apotex merger which is expected to complete by March 31, 2019.

About Strides

Strides, is a global pharmaceutical Company headquartered in Bangalore, India. The Company mainly operates in the regulated markets and has an ‘in Africa for Africa’ strategy along with an institutional business to service donor-funded markets. The Company’s global manufacturing sites are located in India- Bangalore (two sites), Pondicherry, and Chennai, Singapore, Italy- Milan, and Kenya- Nairobi. The Company focusses on ‘difficult to manufacture’ products that are sold in over 100 countries.

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