India Inc Goes Abroad - MAPE Advisory Group

The Industry Context
Healthcare Sector
The Healthcare sector comprises companies in the Pharmaceutical, Healthcare, Life sciences and Biotech space. It has been next only
to the IT sector in terms of deal volume at 20.5%. It also accounts for 18.8% of deals by value.
Value (US$mm)
1000
800
600
400
200
0
Source: Bloomberg, Merger Markets, Mape
2000 2001 2002 2003 2004 2005 Q106
The healthcare sector witnessed a surge of activity in 2005 with 26 overseas deals. The first three months of 2006 has witnessed two of
the biggest deals in the sector; Dr. Reddy's acquiring Betapharm for US$570.3mn and Ranbaxy acquiring Terapia for US$324mn. More
than 90% of the acquisitions in this sector have been made in Europe and North America.
The highly regulated developed economies of Europe and US are becoming the key market for most Indian companies with increasing
generic push in these markets. Most companies in the sector have made their overseas ambitions clear by declaring intentions to acquire
more firms and we expect a fair amount of large cross border deals in this sector. Also, regulatory requirements of market access will
see a host of small sized deals in different markets as in the case of Glenmark Pharma. Given the increasing importance of India as a
base for clinical trials, we foresee more deals in this sector similar to Jubilant's buy-out of Target and Dishman's various deals.
Select Transactions in the Sector
Value No of Deals
Acquirer Target Country Date Deal Size
(US$mn)
Dr. Reddy's API Business of
Roche
Dr. Reddy's Betapharm
Arzneimittel GmbH
Jubilant Target Research
Associates
13
30
25
20
15
10
5
0
Remarks
Mexico Nov-05 59.0 100% in API business at Mexico including all
employees and business supply contracts
Germany Feb-06 570.3 100% in the fourth largest generic drug Co in
Germany; annual turnover of US$195.2mn;
USA Oct-05 33.5 100% in the US based full service Clinical
Research Organization (CRO)
Matrix Docpharma NV Belgium Jun-05 234.7 95.5% in the listed Belgium based generic
company
Ranbaxy RPG AVENTIS SA France Dec-03 80.0 100% in the French company ranked fifth in
generic market with a 6% market share;
Ranbaxy Terapia SA (96.70%
stake)
No. of Deals
annual sales of EUR52.0mn
Romania Mar-06 324.0 96.7% stake in Romania based company
having annual turnover of US$80.0mn
Sun
Pharmaceutical Caraco USA Mar-04 Est. < 50.0 63.1% in Detroit-based company
CP
100% in the UK based company; annual
Wockhardt Pharmaceuticals UK Jul-03 17.7 turnover of US$56.1mn