Lupin to acquire a Japanese company :Angel Broking,

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Lupin to acquire a Japanese company
Lupin will acquire 100% stake in I’rom Pharmaceutical Co. Ltd. (IP) for an
undisclosed amount through its Japanese subsidiary, Kyowa Pharmaceutical
Industry Co. Ltd. We believe this acquisition will strengthen Lupin’s presence in
Japan.
Based in Tokyo, IP produces injection-based medicines and is a unit of integrated
healthcare provider I’rom Holdings Co. Ltd. IP posted sales revenue of Yen5.4bn
in the year ended March 2011. This is Lupin’s second acquisition in Japan after it
bought Kyowa in 2007 for US$100mn. IP’s strong presence in the diagnosis
procedure combination (DPC) hospital segment in Japan, through its line of
injectable products, is an ideal fit with Lupin’s existing oral business portfolio in
Japan.
We believe this acquisition would provide prove to be beneficial for Lupin, given
the immense opportunity in the Japanese generic market. Further, the acquisition
would scale up the company’s sales in Japan, which already is a major component
of Lupin’s overall sales. Lupin has low D/E, thus it can easily raise funds for this
deal. We continue to maintain our estimates until further clarity on the deal. At the
CMP, the stock is trading at 20x FY2012E and 15.1x FY2013E earnings. Hence,
we maintain our Buy view on the stock with a target price of `593.