Sun Pharmaceutical Industries Ltd is all set to acquire multinational generic manufacturer Taro Pharmaceutical Industries (TAROF, Pink Sheets), in an all-cash deal worth $454 million.
To this effect, the Company, together with its subsidiaries, has signed definitive agreements with Taro, which has established subsidiaries, manufacturing and products across USA, Israel and Canada . Of this, North America represents more than 90 per cent of its sales. However, this all-cash deal is subject to shareholder approval and requisite regulatory clearances, according to an official release issued by the Company to the BSE here on Monday.  

Financial muscle
The Company intends to fund the acquisition with internal accruals and proceeds from its earlier $350 million FCCB. This deal values Taro’s equity at $230 million, or $7.75 per share which is at a 27 per cent premium to its May 18, 2007 closing price of $6.10.
Sun Pharma will also refinance $224 million in net debt of Taro. In addition, to providing immediate liquidity for Taro, the company will provide interim financing to the extent of $45 million, the release said.
On the acquisition, Dilip Shanghvi, CMD of Sun Pharma, said, “This is a good opportunity for Sun and Taro to work together to create increasing value and add a complimentary multinational organization to Sun’s business.”
As reported on March 20, 2007 by Taro, it expects to report a substantial loss for the year ended December 31, 2006. Taro US has more than 190 ANDA drug approvals in the US alone, while 26 ANDAs are awaiting approval with the USFDA. Additionally Taro manufactures APIs, including complex chemistry.