Herbert Smith has advised Strides Arcolab Limited (“Strides”) on the sale of its generic pharmaceutical operations in Australia and South East Asia to Watson Pharmaceuticals (“Watson”) for AU$375 million.

Strides, an Indian-based pharmaceutical company listed on the National Stock Exchange and Bombay Stock Exchange in India, sold its 94% shareholding in Ascent Pharmahealth Limited (“Ascent”), its subsidiary with operations in Australia and South East Asia, to Watson, an American company listed on the New York Stock Exchange. 

Ascent is a top five generic pharmaceuticals company in Australia and is present across several countries in South East Asia, including Singapore where it is the leading pharma generics company. Watson is an integrated global specialty pharmaceutical company engaged in the development, manufacturing, marketing and distribution of generic pharmaceuticals and specialised branded pharmaceutical products focused on Urology and Women’s Health. Watson has operations in many of the world’s established and growing international markets.

As part of the transaction, Watson also acquired the remaining 6% shareholding from Dennis Bastas, CEO of Ascent. The transaction signed and closed simultaneously on 24 January 2012. The cash offer from Watson valued Ascent at AU$ 375 million.

The Herbert Smith team assisting Strides was led by relationship partner Chris Parsons and London corporate partner Alan Montgomery who commented: 

“This was an important step for Strides in the context of its strategy to focus on its steriles business and a great addition to Herbert Smith’s cross border M&A and India credentials.” 

The Herbert Smith team comprised Marc Perkins, Joanne Holmes and Kritika Venugopal (corporate); Joel Smith and Laura Deacon (IP); and Isaac Zailer and Perminder Gainda (tax). 

Commenting on the transaction, Arun Kumar, Executive Vice Chairman and Group CEO of Strides, said: 

“The sale of Ascent is a value enhancing and forward-looking initiative for Strides. We have been clear about our intention to focus on our highly attractive steriles segment, which we expect to be our growth engine going forward. The transaction further facilitates the execution of this strategy and unlocks significant value for the group. Furthermore, the proceeds from the transaction considerably strengthen our balance sheet.”

Jefferies International Limited acted as sole financial adviser to Strides. The legal advisers for Strides, apart from Herbert Smith, were Middletons and DSK Legal.