Asahi Songwon Colors on Monday announced its entry into active pharmaceutical ingredient (API) manufacturing with the acquisition of Atlas Life Sciences Private Limited.
The company has executed a Share Purchase Agreement (SPA) with Atlas Life Sciences Private Limited (ALSPL) and certain identified promoters of ALSPL for acquisition of 100% stake in ALSPL in three tranches from certain identified promoters and other shareholders of ALSPL.
Under the first tranche representing 78% stake in ALSPL is completed for a consideration of Rs 480 million. Remaining 6,60,000 shares representing 22% stake in ALSPL will be acquired in two tranches (representing 11% stake in each tranche) for a consideration determined based on EBITDA prevailing for the period October 1, 2022 to September 30, 2023 and October 01, 2023 to September 30, 2024 respectively, in terms of the SPA.
With the acquisition Asahi Songwon has not only gained a fully-operational WHO GMP certified API manufacturing facility in Odhav area of Ahmedabad but also a research and development (R&D) facility, a corporate office, and a 15,000-square-meter land parcel in Chhatral with EC permission for 32 products, for future expansion activities.
In addition, with Atlas Life’s dominant market position in pregabalin API used to make anticonvulsant drugs, Asahi gains access to Atlas Life’s existing manufacturing capacity of 25 tonnes per month leading to 90% supplies to the domestic pharma majors. Besides pregabalin, Atlas Life’s portfolio of products include R-compound, phenylephrine HCL, gliclazide, amisulpride and levosulpiride.
While the company sees synergy between its existing chemicals and pigments business with that of Atlas Life’s API business, Gokul Jaykrishna, CEO and Joint MD, Asahi Songwon Colors Limited said that the group aimed at capitalising on the present ‘China+1’ strategy being adopted by Indian manufacturers and government’s push for local manufacturing of pharmaceuticals raw materials.
Asahi Songwon plans to add new molecules including one in the area of diabetes management, even as it plans a greenfield project at the Chhatral site in Ahmedabad.