- 25 Apr 2023
- ICICIdirect Research
IPCA TO ACQUIRE UNICHEM LABORATORIES
IPCALAB - 1368 Change: -14.60 (-1.06 %)News: lpca Laboratories has announced that the company has entered into a definitive share purchase agreement for acquisition of 2,35,01,440 fully paid-up equity shares of Rs 2/- each,· constituting 33.38% of the paid up equity share capital of M/s. Unichem Laboratories from one of its promoter shareholder at a price of Rs 440 per equity share aggregating to Rs 1034.06 crore. The company is also making an open offer to the public equity· shareholders of Unichem to acquire from them upto 26% of the fully diluted outstanding equity share capital at a price at Rs 440 per share.
View: At 2.4x TTM FY23 sales, the deal seems a tad costlier given the lower profitability of Unichem's exports driven business. Ipca's financial outgo would be ~ Rs 1800 crore after considering open offer as well, which is a substantial outgo. On the bright side, Unichem owns ~Rs 1200 crore worth of gross block approved by global agencies with unblemished track record. We would wait for management commentary about possible synergies.
Impact: Neutral