Zydus Cadila acquires 15 pc stake in Zydus Noveltech, Zydus Technologies for over Rs 1 crore

New Delhi: Drugmaker, Zydus Cadila also known as Cadila Healthcare Ltd.(CHL) has recently announced that the company has acquired 15 per cent stake in two of its subsidiaries, Zydus Technologies Ltd (ZTL) and Zydus Noveltech Inc., USA (“ZNI”) for over Rs 1 crore from minority partner Sharad Govil.

The cash transaction of USD 2,25,000 (over Rs 1 crore) will be made towards the acquisition of 15% equity share capital of ZTL, from the minority partner, providing an exit route to its the strategic and minority partner, Shared Govil. The acquisition was valued at $225,000 (roughly Rs 1.62 crore) for 15 per cent equity share capital, representing 7.5 million fully paid-up equity shares of Rs 10 each.

"We would like to inform that the Company has acquired 15% equity share capital of Zydus Technologies Limited (“ZTL”), a subsidiary Company in which the Company is already holding 85% equity share capital. Pursuant to the same, ZTL has become a wholly-owned subsidiary Company," Cadila said in a filing

"Further, the Company has also acquired 15% common stock of Zydus Noveltech Inc., USA (“ZNI”), a subsidiary Company in which the Company is already holding 35% common stock. In view of the same, both ZTL and ZNI will become wholly-owned subsidiary Companies of the Company, " the firm added.

Cadila Healthcare also informed about that the Board of Directors at their meeting held recently, have approved the draft Scheme of Amalgamation for amalgamation of ZTL with the Company.

Zydus Technologies Limited (“ZTL”), is engaged in the business of manufacturing and marketing of Novel Drug Delivery System (”NDDS”) products mainly for the release of pain, hormones and cardiovascular therapeutic areas. Net Wonh of ZTL as on September 30, 2019, is negative at Rs. 40.72 crores and turnover for the period of six months ended on September 30, 2019, is Rs. 9.93 crores.

The acquisition would fall within the related party transaction. The Company holds 85% equity share capital of ZTL and hence is the promoter of ZTL. Cadila also stated that the transaction is on an arm’s length basis.

ZTL is in the business of manufacturing and marketing of Novel Drug Delivery System (NDDS) products mainly for the release of pain, hormones and cardiovascular therapeutic areas. ZTL has a manufacturing plant in SEZ, Ahmedabad, Gujarat, India and sells its products to the United States of America. ZTL was incorporated on February 16, 2009.

Turnover of ZTL for last three years is as- 2016-2017 NIL, 2017-2018 NIL, 2018-2019 Rs 2.09 crore.

As per the filing, the acquisition will be completed within a month.