Claris Lifesciences locked in upper circuit on sale of subsidiary

Claris Lifesciences is to sell its wholly owned subsidiary Claris Injectables for approximately USD 625 million (Rs 4237 crore) to US-based Baxter International Inc. Credit Suisse and Jefferies acted as the financial advisors to Claris Lifesciences. Meanwhile, Herbert Smith Freehills LLP, Veritas and AZB acted as legal advisors for the company.

The board of directors of both the companies have approved the acquisition, which is expected to close in the second half of 2017. The deal is expected to be modestly accretive to adjusted earnings and increasingly accretive thereafter.

On the financial front, Claris Lifesciences has earned about 78 per cent, amounting to Rs 623 crore from injectable business in FY16. The company injectables business has been growing rapidly over the last few years. It has total 11 approved products in the US; and around 25 ANDAs under review with FDA.

Baxter has plans to fund the USD  625 million deal with cash on hand, debt or a combination of both. The company wants to close it by the second half of 2017. It is expecting accretive revenue growth and double digit EBITDA return on invested capital by the fifth year. Meanwhile, Claris Lifesciences management is likely to start a new non-pharma venture.

The share price of Claris Lifesciences increased by 19.99 per cent on bourses and is trading at Rs 430.1 on an intraday basis. The share price of the company is locked in upper circuit on the sale of its injectables business.