Aurobindo Pharma to sell US-based Natrol for about Rs 4,048 crore

 

Aurobindo's stock reacted positively to the news, going up in morning trade but later settled flat at Rs 784.65 on the BSE.

Hyderabad-based Aurobindo Pharma has reached a definitive agreement to sell its US subsidiary Natrol LLC to private equity firm New Mountain Capital and its affiliate Jarrow Formulas in an all-cash transaction valued at $550 mn (about Rs 4,048 crore). This would make Aurobindo a zero-debt company and also help it repay loans, analysts said.

The deal, subject to customary closing conditions and regulatory approvals, is expected to close by January.

Aurobindo said Natrol, which it acquired in December 2014, had been a “consistently profitable business” growing on all fronts. Natrol’s annual sales for the 12 months ended March 2020 were worth around $157 million.

Aurobindo’s stock reacted positively to the news, going up in morning trade but later settled flat at Rs 784.65 on the BSE. The Nifty Pharma index was down 1.6 per cent on Monday.

The US constitutes around 50 per cent of the company’s turnover, and Europe 22 per cent.

At the end of the first quarter of FY21, Aurobindo’s net debt stood at $168 million. In the June quarter, its revenue from the US business grew 15.6 per cent to Rs 3,107 crore, about 52.4 per cent of the consolidated revenue. In FY20, the company posted a robust growth rate of 18 per cent in its revenue from operations to Rs 23,098 crore, even as its US business grew 27 per cent.