Recipharm AB Completes Acquisition Of A Majority Stake In Indian CMO Nitin Lifesciences

STOCKHOLM--(BUSINESS WIRE)--Regulatory News:

“I am delighted that we have now completed this transaction. The combination of Nitin and Recipharm represents an important step in the development of both companies and I am pleased that both Dr Chetan Sobti and Nitin Sobti will be continuing in their current positions”

The contract development and manufacturing organisation, Recipharm AB (publ) announces that it has today completed the acquisition of a majority stake in Nitin Lifesciences Limited (“Nitin”), an Indian sterile injectables CMO, currently owned by the Sobti family.

Recipharm has acquired 74 % of the shares for a purchase consideration of INR 6,713 million (SEK 824 million)[1] on a cash and debt free basis.

Thomas Eldered, CEO of Recipharm said “I am delighted that we have now completed this transaction. The combination of Nitin and Recipharm represents an important step in the development of both companies and I am pleased that both Dr Chetan Sobti and Nitin Sobti will be continuing in their current positions”.

Mr. M.M Sobti, founder of Nitin Lifesciences Ltd., commented “This partnership represents a real opportunity to take Nitin Lifesciences to a new level. The combination allows both organisations to access a wider customer base and to gain important learning from each other. The Sobti family is very pleased to be entering into this new strategic partnership which will be hugely beneficial for both companies”.

Highlights

· The combined entity will have enhanced scale, reach and profitability. Nitin Lifesciences had 2015 net sales of approximately INR 2 970 million (SEK 391 million) [2], corresponding to 12 % of Recipharm’s 2015 total net sales. The EBITDA margin 2015 was approximately 24 %.

· Significantly bolsters presence in high growth developing territories and the deal firmly establishes Recipharm’s emerging market strategy. Provides excellent exposure and direct entry into the rapidly expanding Indian market.

· Recipharm’s global position in sterile injectables including lyophilization will be further strengthened.

· The implied value for 100 % of Nitin equates to INR 9,071 million (SEK 1,114 million)1and represents approximately 11.7 times 2015 EBITDA of INR 721 million (SEK 95 million)[2],[3].

· Accretive to organic growth and EPS.

About Nitin Lifesciences

Nitin Lifesciences Ltd is a rapidly growing Indian pharmaceutical company with a strong presence in injectable manufacturing. Established in 1994 by Mr M.M. Sobti and the late Mr M.V. Kakkar, Nitin has emerged as one of the largest small volume parenteral manufacturers in India and is engaged in contract manufacturing to major Indian and international pharmaceutical companies.

Headquartered at Karnal in Northern India, Nitin has three modern facilities for small volume parenterals located at Karnal (Haryana) and at Paonta Sahib (Himachal Pradesh). The newest facility in Paonta Sahib was taken into operations in 2014 and the business provides high technology pharmaceutical manufacturing solutions.

The company specializes in manufacturing liquid ampoules, liquid vials, sterile dry powder (beta lactam & non beta lactam), multidose eye/ear drops and lyophilized vials covering more than 200 formulations across various therapeutic areas including antibiotics, anti-malarial, NSAIDs, anti-inflammatory and local anesthetics. It brings a high quality customer base including a growing number of multinational Big Pharma customers supplying the Indian domestic market.

The company will continue to trade as Nitin Lifesciences Ltd.

In 2015 Nitin reported sales of INR 2,970 million (SEK 391 million) and an EBITDA of INR 721 million (SEK 95 million) corresponding to an EBITDA margin of 24.3 %.[4],[5] The EBITDA margin has been between 19 % and 24 % during the last three financial years and margin is expected in the lower end of this range in the coming years. Nitin is essentially debt free.

Since 2012FY, Nitin has reported a CAGR of over 20 %. The current capacity will continue to allow growth but at a more moderate rate.

For more information please visit www.recipharm.com

This information is published in accordance with the Swedish Securities Market Act, the Swedish Financial Instruments Trading Act and/or the regulations of NASDAQ Stockholm. This information was submitted for publication on 7 April 2016, at 07:45 am CET.

About Recipharm

Recipharm is a leading CDMO (Contract Development and Manufacturing Organisation) in the pharmaceutical industry employing some 2,700 employees. Recipharm offers manufacturing services of pharmaceuticals in various dosage forms, production of clinical trial material including API and pharmaceutical product development. Recipharm manufactures several hundred different products to customers ranging from Big Pharma to smaller research- and development companies. Recipharm’s turnover is approximately SEK 3.4 billion and the Company operates development and manufacturing facilities in France, Germany, Italy, Israel, Portugal, Spain, Sweden and the UK and is headquartered in Jordbro, Sweden. The Recipharm B-share (RECI B) is listed on NASDAQ Stockholm.

For more information on Recipharm and our services, please visit www.recipharm.com

Recipharm has retained Veritas Legal and Calissendorff Swarting as legal advisors, PwC as financial/ tax advisors and WSP as environmental advisors for the transaction.

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[1] (http://file///G:/Shared/Corporate%20Development/IR/Nile/Press%20release%20-%20Recipharm%20completes%20acquisition%20of%20Nitin%20Lifesciences%20EN%2020150411.docx#_ftnref1) Exchange rate SEK/INR 0.123

[2] (http://file///G:/Shared/Corporate%20Development/IR/Nile/Press%20release%20-%20Recipharm%20completes%20acquisition%20of%20Nitin%20Lifesciences%20EN%2020150411.docx#_ftnref2) Exchange rate SEK/INR 0.132

[3] (http://file///G:/Shared/Corporate%20Development/IR/Nile/Press%20release%20-%20Recipharm%20completes%20acquisition%20of%20Nitin%20Lifesciences%20EN%2020150411.docx#_ftnref3) Based on audited figures according to Indian GAAP

[4] (http://file///G:/Shared/Corporate%20Development/IR/Nile/Press%20release%20-%20Recipharm%20completes%20acquisition%20of%20Nitin%20Lifesciences%20EN%2020150411.docx#_ftnref4) Based on audited figures according to Indian GAAP

[5] (http://file///G:/Shared/Corporate%20Development/IR/Nile/Press%20release%20-%20Recipharm%20completes%20acquisition%20of%20Nitin%20Lifesciences%20EN%2020150411.docx#_ftnref5) Exchange rate SEK/INR 0.132

Recipharm AB (publ), Org. nr 556498-8425

Adress Lagervägen 7, 136 50 Jordbro, Sverige, Telefon 46 8 602 52 00, Fax 46 8 81 87 03

www.recipharm.com

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