Zydus Lifesciences to acquire Sterling Biotech's API biz for Rs 84 crore

Zydus Lifesciences Ltd announced that it will acquire Sterling Biotech's 'Target Business', which is principally engaged in the manufacturing process of fermentation-based active pharmaceutical ingredients products, as well as a production facility in Masa, Gujarat, for a pre-agreed price of Rs 84 crore.

When Zydus bought a 50% investment in Sterling Biotech Ltd (SBL) in August of this year, the business obtained the right to acquire SBL's 'Target Business' at a predetermined price. "This right has been exercised by the company," Zydus Lifesciences stated in a filing.

At their meeting on September 17, 2024, the company's board of directors approved a business transfer agreement (BTA) to purchase SBL's active pharmaceutical ingredients (API) business -- the Target Business -- on a going concern basis, on a slump sale basis, without assigning values to individual assets and liabilities, on a cash-free and debt-free basis for a pre-defined lump-sum consideration of Rs 84 crore, it added.

SBL's 'Target Business' includes a portfolio of fermentation-based API products such as lovastatin, daunorubicin, doxorubicin, and epirubicin. According to the statement, the company's turnover for the fiscal year ending March 31, 2024 was Rs 66.83 crore.

On the rationale behind the acquisition of the API business of SBL, Zydus said, "...it is an excellent strategic fit for the company given that it has fermentation-based products portfolio with a manufacturing facility at Masar, near Vadodara, Gujarat which is in proximity to the company's existing facility at Dabhasa and can meet our strategic and commercial objectives."