Piramal Enterprises' US arm to buy Ash Stevens for $53 million

Image: Mexy Xavier

Ajay Piramal, Chairman, Piramal Group

Piramal Enterprises Limited’s wholly-owned US subsidiary will acquire a 100 percent stake in Ash Stevens Inc, a contract development and manufacturing organization (CDMO).

As part of an all-cash deal, Piramal will pay the US-based CDMO $ 42.95 million (approx. Rs 286 crores) plus an earn-out consideration capped at $10 million. This transaction is expected to be completed by August end, the company said in a press release on Tuesday.

As one of the leaders in high potency APIs (HPAPIs) manufacturing, the company has a strong safety record of working with high potency anti-cancer agents and other potent therapeutics, the statement added.

“North America is a key market that we can now service with our three local facilities - the Coldstream Labs in Kentucky for fill finish needs; the Torcan facility in Toronto for complex high value APIs and now, Ash Stevens in Michigan for HPAPIs……. We expect this acquisition to also be synergistic with our Antibody Drug Conjugates (ADCs) and injectable business. We can now fulfill client requirements for a single source of supply for both high potent APIs and drug products,” Vivek Sharma, CEO of Piramal Pharma Solutions said.

Piramal Enterprises stock ended the day up at Rs 1780.10, Rs 103.95 (+6.20 percent) higher over its previous close.
Founded in 1962, Ash Stevens is a full-service pharmaceutical contract manufacturer with over 50 years of experience developing drug substances and manufacturing active pharmaceutical ingredients (APIs).

Dr Stephen Munk, CEO of Ash Stevens, said, “We look forward to working with the Piramal leadership and management team, to develop API solutions that benefit customers and improve the lives of patients. The commitment that Piramal has shown towards growing its healthcare businesses, coupled with the complementary capabilities that our two firms have, makes this an exciting time for Ash Stevens and our employees.”

The companies have identified areas where they can create significant value together, and will be moving forward rapidly to achieve those objectives.

Piramal Enterprises, the healthcare-to-financial services conglomerate posted consolidated revenues of around $ 1 billion in FY2016, with 61 percent of revenues from outside India.