Jubilant said it had acquired an 80 per cent stake in Pharmaceutical Services and PSI Supply NV (PSI) for €13.5 million in cash. The company has formed a wholly owned subsidiary - Jubilant Pharma - to oversee the European business.
The founder of Pharmaceutical Services, Lieve Vermassen, will retain the remaining 20 per cent in PSI, but Jubilant has the option of gaining 100 per cent ownership in the next five years.
Jubilant's chairman Shyam S Bhartia said that the acquisition would allow it to tap in to Europe's 'emerging market for generic products' with 'high growth opportunities'.
PSI has amassed a portfolio of 19 generic API dossiers, and has 31 more at various stages of development, according to Jubilant, with three due to be filed shortly.
The Belgian firm provides Jubilant with an entry into finished products, to complement its existing operations in API supply and contract research and manufacturing, which brought in sales of around $250 million (€208m) last year.
PSI had sales of €9.6 million in the last fiscal year, with an operating profit of €2.8 million.
"With this acquisition, the company would now have presence across the pharmaceuticals value chain from manufacturing of API's to sale of formulated products," Jubilant said. It will allow it to develop new off-patent APIs, as well as formulated generic drugs.
Jubilant's ability to prepare and file dossiers through PSI will also help it use third-party APIs as a basis for selling formulated products in Europe, which already accounts for 38 per cent of the Indian company's revenues. The European generics market is currently showing double-digit growth and should be worth in excess of €5 billion in 2008.