NATCO Pharma Limited announced that its Board of Directors has approved the acquisition of 51,643,319 shares, representing 35.75% of Adcock Ingram Holdings Limited, South Africa, for a cash offer of ZAR 75.00 (approximately US$ 4.27) per share. The total investment cost is approximately ₹2,000 crore, including transaction costs and other expenses. Additionally, the board approved the incorporation of a wholly-owned subsidiary in South Africa with an investment of up to ₹2,100 crore.
| Particulars | Details |
|---|---|
| Target Entity | Adcock Ingram Holdings Limited, South Africa |
| Stake Acquired | 35.75% (51,643,319 shares) |
| Acquisition Price | ZAR 75.00 (approx. US$ 4.27) per share |
| Total Investment | ₹2,000 crore (approx.) |
| Indicative Completion Date | On or before December 31, 2025 |
NATCO Pharma will acquire 51,643,319 shares of Adcock Ingram, which includes 50,351,444 ordinary shares from the public and 1,291,875 treasury shares/fresh issuance from Adcock Ingram Holdings Limited. This acquisition will result in NATCO holding a 35.75% stake in Adcock Ingram. The consideration will be in cash at ZAR 75.00 per share, with the total investment amounting to approximately ₹2,000 crore, inclusive of transaction costs and other expenses. The acquisition is subject to regulatory approvals, including compliance with the Foreign Exchange Management Act governed by the Reserve Bank of India, South Africa's Takeover Regulation Panel (TRP), and the South African Reserve Bank (SARB). The indicative time period for completion of the acquisition is on or before December 31, 2025.
Incorporation of Wholly-Owned Subsidiary
NATCO Pharma plans to incorporate a wholly-owned subsidiary in South Africa, named NATCO Pharma South Africa Proprietary Limited, with an investment of up to ₹2,100 crore. The objective is to enter new geographies for growth and increased profitability. This investment will be subject to ODI under FEMA Regulations and regulatory approvals from South Africa. The indicative time period for completion of the acquisition is on or before December 31, 2025.
Liquidation of Time Cap Overseas Limited
The Board has also approved the liquidation of M/s. Time Cap Overseas Limited (TCOL), a wholly-owned subsidiary of the company. Following the liquidation, NATCO Pharma will directly hold the investment in NatcoFarma do Brasil Ltda., which is a step-down wholly-owned subsidiary.
About Adcock Ingram Holdings Limited
Founded in 1890 in South Africa, Adcock Ingram is a pharmaceutical company operating across four segments: Prescription, Consumer, OTC, and Hospitals. It has a diverse portfolio of products ranging from generic and branded formulations to critical-care hospital products, as well as consumer & home-care products.
Adcock Ingram generated revenue of R9.6 billion (US$536 million) in the financial year June 2024 and delivered a gross margin of 33.4%. The company achieved EBITDA of R1.4 billion (US$78 million) at a margin of 14.6%, and a profit after tax of R814 million (US$45 million). For the period ending December 2024, the company delivered revenue of R4.7 billion (US$262 million) and achieved EBITDA and profit after tax of R677 million (US$38 million) and R389 million (US$22 million), respectively.
Adcock Ingram generated revenue of R9.6 billion (US$536 million) in the financial year June 2024 and delivered a gross margin of 33.4%. The company achieved EBITDA of R1.4 billion (US$78 million) at a margin of 14.6%, and a profit after tax of R814 million (US$45 million). For the period ending December 2024, the company delivered revenue of R4.7 billion (US$262 million) and achieved EBITDA and profit after tax of R677 million (US$38 million) and R389 million (US$22 million), respectively.
Strategic Rationale
Rajeev Nannapaneni, CEO & Vice Chairman of NATCO Pharma Limited, said: “Adcock Ingram is a respectable pharmaceutical company with well-recognised brands and products and maintains a leading position in the South African pharmaceutical market. The proposed transaction will provide NATCO Pharma with a well-established entry into the Southern African market. It will also allow NATCO Pharma to tap into new revenue streams and expand our footprint in one of the largest and growing emerging markets, while providing a gateway to the African continent."
