May 16, 2012, 10:00 AM
Piramal Healthcare Continues Overseas Expansion With Decision Resources
Deal
By NEHA THIRANI
Arko Datta/Reuters
Ajay Piramal, chairman of Piramal group, speaks to fund managers and
analysts at his office in Mumbai, Maharashtra, in this May 21, 2010
file photo.
The Indian drug maker Piramal Healthcare said Tuesday that it will buy
Decision Resources Group, a U.S. health care information provider, for
$635 million. The acquisition is the latest in a string of overseas
deals by the Indian company as it expands its research and development
capabilities.
The Decisions Resources Group, which is based in Burlington,
Massachusetts, has about 300 analysts, and its client list includes 48
of the top 50 global pharmaceutical companies. The company, which
projects revenues of $160 million for 2012, has grown 20 percent each
year in the past five years.
“We have always wanted to have a diversified portfolio of investments
not only India but also outside,” Ajay Piramal, chairman of the Indian
company, said in an interview. “This is really an acquisition of a
business that is a market leader in the health care information space.
They provide high-quality research data analysis, have a very good
track record of growth and have high cash flows.”
Piramal Healthcare said the acquisition, which is expected to be
completed by the end of June, will be financed by a mix of debt and
equity.
After Abbott Laboratories bought Piramal Healthcare’s domestic
formulation business for $3.7 billion in 2010, Mr. Piramal began to
look overseas for investments. Piramal Healthcare acquired BioSyntech,
a Canadian medical device company, for $3.9 million in 2010, and in
April, the Indian company said it would buy a part of the research and
development portfolio of Bayer HealthCare Pharmaceuticals of Germany, a
deal that gives Piramal Healthcare the rights to a possible treatment
for Alzheimer’s disease.
While Indian drug companies have been known for mass-producing generic
drugs cheaply, Mr. Piramal has been attempting to move away from this
business model.
“For us for the next couple of years are about investing into drug
discovery and development, and the movement of our products from the
clinic to the market place,” said Mr. Piramal. “Until now, most new
drugs came from the developed world, and so we are trying to change the
paradigm here. In the future, I would like to see drugs that have been
developed in emerging markets as well – and that is what we are
endeavoring towards.”
Following the acquisition, Decision Resources group will operate as a
stand-alone business, keeping its current leadership and its
headquarters in Massachusetts.
“This is an excellent opportunity for our business, customers and
employees,” Peter Hoenigsberg, chief executive of Decision Resources
Group, said in a statement. “My team and I are excited to be part of
the Piramal Group and are confident that its expertise in acquiring,
integrating and growing businesses will support our continued growth.”
Ajaykumar Sharma of the consulting firm Frost & Sullivan said Piramal
Healthcare’s domestic experience will help the company maximize its
investment in the Decision Resources Group.
“With the domestic market sold to Abbott, Piramal has a lot of cash
reserves on hand,” said Mr. Sharma. “They are looking across the health
care spectrum to grow and expand. With the information segment poised
to see an explosion in the coming years, this investment seems to be in
the right direction for Piramal as they wish to expand beyond their
traditional areas of operation.”
E-mailNew York Times (May 16, 2012)
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