[South Africa] Ascendis to acquire Cipla veterinary business for R375 million
Ascendis Health, the high growth health and care brands group, is to purchase the southern African veterinary operations of Cipla India for R375 million.
Cipla Vet (companion animals) and Cipla Agrimed (commercial animals) sell a range of high quality animal medicines. The business was established in 2004 and the sale follows the decision by Cipla India to divest its southern African veterinary operations to focus on human health care only in South Africa.
Ascendis Health CEO Dr Karsten Wellner said the Cipla animal health businesses provide an excellent strategic fit with the Ascendis Phyto-Vet division which focuses on animal and plant health products.
“The acquisition will enable Ascendis to expand into the attractive veterinary pharma market, with high margin products in strong growth segments. The new business will complement our presence in the pharma industry and Phyto-Vet’s biosciences business, while adding therapeutic products to our portfolio which is an area where Ascendis has not had a strong representation in the past,” he said.
Cipla Vet sells through over 1 000 outlets including vet practices, vet shops, equine stores and wholesalers. The business has a strong presence in antibiotics, and endo- and ectoparasiticides, with key brands including Triworm and Petcam.
Cipla Agrimed has a leading position in antimicrobials and endectocides in South Africa which are sold mainly through agri-co-operatives, tenders and directly to farmers.
Dr Wellner said currently only about 10% of Cipla’s veterinary sales are generated through export into Namibia, Botswana, Zambia and Angola. “This provides an excellent opportunity for synergies through Phyto-Vet’s existing African network. The Cipla products will also support Phyto-Vet’s planned expansion into new African markets and the further internationalisation of the business.”
Cipla Vet and Cipla Agrimed reported a combined profit after tax of R31 million in the year to March 2016, with the net asset value totalling R138 million. The businesses have generated double digit sales and profit growth over the past three years.
The purchase price of R375 million includes a deferred payment of R50 million over 15 months. The acquisition is subject to competition approvals and the effective date is expected to be 01 April 2017.
“The acquisition will accelerate our entry into the veterinary pharma market and is strategically aligned with Phyto-Vet’s growth plans. Cipla’s animal health product range is highly regarded in the market and we are excited about the addition of these businesses which will be margin enhancing to the group,” concluded Dr Wellner.