Piramal Enterprises to demerge healthcare, financial services

Mumbai, Jan 30 () The

Ajay Piramal-led Piramal Enterprises

will demerge its healthcare and financial services businesses soon, a top company official said today. "We want to ultimately look at

Piramal Enterprises

as separate business for pharmaceuticals and financial services. In the medium term we will do that. All our acquisitions, and in some ways moving up in value chains and getting more critical mass are steps towards that,"

Piramal

Enterprises Chairman Ajay Piramal told reporters here. Declining to give a time-line, Piramal said "we have not yet fixed time line. I think the Board will decide, but the direction is moving towards that." Ajay Piramal curtailed his presence in healthcare after he sold erstwhile

Piramal Healthcare

's domestic formulations division for USD 3.7 billion to

Abbott

in 2010. The company entered into the finance business through strategic investments and joint ventures. Piramal Enterprises is growing largely organically with a CAGR of 17 per cent over last the five years. To boost its product portfolio, Piramal Enterprises today announced acquisition of portfolio of a drugs for spasticity and pain management from UK-based

Mallinckrodt

for USD 171 million (around Rs 1,160 crore) in an all-cash deal. "We continue to invest in the growth of our pharmaceutical businesses. This would be our seventh pharma acquisition in the last two years, taking our investment for inorganic growth to Rs 3,000 crore across our pharmaceutical businesses to boost future growth," Piramal said. "All these acquisitions are expected to be value accretive and will improve our pharmaceutical segment's growth. High EBITDA margins of the acquired products are expected to enhance our profitability." The company's UK-based wholly-owned subsidiary

Piramal Critical Care

has entered into an agreement with Mallinckrodt for acquiring the drugs and may also pay an additional USD 32 million, depending on financial performance of the acquired assets over the next three years till FY21. The acquired portfolio includes

Gablofen

(baclofen), a severe spasticity management product, currently marketed in the US, and two pain management products. Commenting on synergies from the acquisition, Piramal said "Gablofen used by doctors and hospitals leverage our US operations and capabilities. "With this acquisition, we have entered into an attractive niche market. Intrathecal baclofen serves an important medical need to severe spasticity patients. Access to this niche market diversifies our offerings in the US market and allows further growth within the global generic hospital drug market of more than USD 20 billion in size. The company's 35-40 per cent revenues comes from the US operations, he said, adding it had 24 US

FDA

inspections, but had no issues with that in last few years. AP RSY