Strides Arcolab sells Australia, SE Asia generics biz

Moneycontrol Bureau

Strides Arcolab has sold its 94% stake in Australian and south east Asian subsidiary Ascent Pharmahealth to Watson Pharmaceuticals for Australian dollar 375 million. Ascent is among the top five generic pharmaceutical companies in Australia and is present across several south east Asian countries. Strides Arcolab shares jumped post the announcement and were trading up near 16% at Rs 472 on NSE. The sale of its generic business will strengthen its balance sheet and help Strides unlock value and focus on its steriles segment, it said on Tuesday. "The sale of Ascent is a value enhancing and forward-looking initiative for Strides. We have been clear about our intention to focus on our highly attractive steriles segment, which we expect to be our growth engine going forward," said Arun Kumar, executive vice chairman and Group CEO. The sale of the generics business will also help it reduce debt by about USD 250 million, Strides said on CNBC-TV18. Its debt equity ratio will drop to 0.6-0.7 levels post the stake sale, it said. As a part of the deal, Watson has also acquired the remaining 6% stake held by Ascent CEO Dennis Bastas. Jefferies International was financial advisor to Strides Arcolab on the deal.