Adcock Ingram sells Indian business

Adcock Ingram (JSE: AIP) has announced the disposal of its 100% shareholding in Adcock Ingram Healthcare Private Limited, the marketing and selling operation in India, under a definitive agreement to Samara Capital Partners, an India focused private equity firm.

The enterprise value of the deal is 1.51 billion rupees ($22.7 million), which will be settled in cash. Adcock Ingram’s shares fell 4.3% to 4,451 on the news. Adcock Ingram, South Africa’s second largest drugmaker, says the rationale for the disposal is that the Indian pharmaceutical marketing and selling business does not meet the company’s current investment criteria and as a result it has decided to exit this business.

Analysts said the separation of the businesses was a strategic move which would allow Adcock Ingram to take advantage of cheaper manufacturing costs in India and market products in South Africa, according to a report by India’s Economic Times.

Adcock Ingram confirmed that due to the pressure on regulatory services in South Africa and a shortage of skills in this area, the Indian regulatory services business remained an important complement to its South African regulatory structure.