Thread by @ValueEducator

#PIIndustries is an established player in the Innovative Agro #CDMO space in India. They were planning to enter the Pharma CDMO space and have recently done some acquisitions as part of this plan through PI Health Sciences which is its wholly owned subsidiary for the Pharma space

1. Acquisition 1:
-The company has acquired 100% stake in Therachem Research Medilab India Pvt Ltd and Solis Pharmachem which are the Indian subsidiaries of the American entity Therachem Research Medilab LLC.

-These acquisitions have been done at a consideration value of $42 million and $3 million respectively. The company has also acquired some of the assets of TRM US for a consideration of $5 million through its subsidiary PIHS LLC.

-In addition to the upfront purchase cost, PIHS LLC will pay up to $25 million over the next 6 years as and when TRM US achieves the milestones agreed upon in the TRM US APA. TRM India,

-Solis Pharmachem and TRM US are into the business of research, development and manufacturing of chemical compounds which are ultimately used for making APIs and other pharmaceutical products.

2. Acquisition 2:
-The company has acquired 100% stake in Archimica which is an Italian company through PIHS BV which is the company’s subsidiary in the Netherlands. The company has acquired the stake from Plahoma Twelve GmbH which was the sole shareholder of Archimica.

-This acquisition has been done for a consideration of €34.2 million. Archimica is into the business of API manufacturing and CDMO with over 60 customers in more than 30 countries.

•TRM is working mostly on patented molecules while Archimica makes niche APIs which are generic in nature.

•PIHS plans to combine the R&D skills of the acquired entities with the new pharma research center of the company which will be coming up at IKP Hyderabad.

This pharma research center will offer CRO and CDMO services to various clients across the entire length of the pharmaceutical value chain.

•The company plans to do a capex of $10-15 million per year for the next 3-4 years for R&D setup, TRM and Archimica as part of their

plan for the pharma business vertical. The company is anticipating the pharma vertical to be one of their key pillars for future growth.

•The plan of the company here is to create a differentiated position in the pharmaceuticals sector by leveraging its core competencies

in complex chemistry, process development, operational excellence, technology platforms and global reach through partnerships with prominent innovators.

•The company will fund these acquisitions with qualified institutional placements and internal accruals with the

transactions being done purely in cash. The completion of these transactions and the subsequent integration of these entities is expected to be completed by Q1FY24 subject to the regulatory approvals.

•The company will focus more on the innovative CDMO space over the generic CDMO space as part of their business plan for pharmaceuticals.

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