Transaction:
- Zydus Lifesciences Limited has entered into exclusive negotiations to purchase a controlling stake of 85.6% in France-based Amplitude Surgical SA for a deal valued at €256.8 million (over ₹2,400 crore).
- Zydus will file a mandatory cash tender offer for the remaining shares of Amplitude at the same purchase price of €6.25 per share, potentially leading to a full acquisition valued at €300 million (₹2,850 crore) and subsequent delisting from Euronext Paris.
- Zydus Life will make a mandatory offer to buy shares via a simplified cash tender offer for the balance 14.4% stake for 43.2 million euros.
About Amplitude Surgical SA:
- Amplitude Surgical is a European MedTech leader in lower-limb orthopaedic technologies, specialising in the design and development of knee and hip prostheses, which are implanted in place of damaged or worn-out joints.
- The company has also been expanding internationally through its units in more than 30 countries. As of June 2024, Amplitude Surgical had 428 employees.
- Supported by PAI Partners, through its Mid-Market Fund, Amplitude Surgical has experienced significant growth over the last four years, driven by new product development, international growth, investments in manufacturing capabilities, and R&D.
About Zydus Lifesciences Limited:
- Established in 1995 Cadila Healthcare following the split of Cadila Laboratories, division managed by Mr. Pankaj Patel, was renamed Cadila Healthcare, which was renamed Zydus Life in Feb 2022.
- Zydus Life is one of the leading pharmaceutical companies in India. It also has a growing presence in the regulated markets, particularly the US, and is one of the top 5 players in the US generics market in terms of prescriptions. Its other segments include emerging markets formulations, consumer wellness, animal healthcare and bulk drugs.
- The group has a network of manufacturing facilities which comprises of 18 formulation manufacturing units, 1 animal health unit, 6 bulk drug manufacturing units, 3 biologics units, 6 vaccine units and 4 consumer product facilities. Moreover, the company has eight R&D centers. As on September 30, 2024, 74.98% stake in Zydus Life was held by the promoters.
Rationale:
- Zydus Lifesciences’s MD, Mr. Sharvil Patel, said that in Amplitude Surgical, they saw several medium-term & long-term growth opportunities with respect to portfolio, capabilities, manufacturing, & geographies.
- With this move Zydus would be making a foray into the global MedTech space, adding that they wanted to offer services beyond just medicines, whether it was medical devices that were highly technologically oriented or companion diagnostics areas, where they felt better patient outcomes could be seen.
- Zydus sees significant opportunities for the growth of medical devices, both domestically and overseas, and was eyeing three segments – orthopedics, interventional cardiology, and nephrology.
- Patel pointed out that there was currently a high burden of imports versus exports in India and that there was a significant skew toward a large number of imports related to medical devices and medical technology. He added that while India’s exports were growing, there was still a large opportunity to scale up.
- He further stated that although there were a few medical devices companies in existence, none had yet achieved the scale and size that one would aim for. He believed that over the next five to seven years, they saw a significant opportunity to grow and build a very sizable medical device business in the three mentioned areas, through both organic and inorganic means.
- Zydus may introduce Amplitude’s products to the Indian market. At present, Amplitude has no presence in India.
- The acquisition price is at 80.6% premium over the last closing price as of March 10, and premiums of 88.2% and 92.2% over the 3-month and 6-month volume-weighted average price of Amplitude Surgical, respectively.
- The Indian orthopedic limb implants market, valued at $791.4 million in 2023, is projected to reach $1,256.3 million by 2030, driven by factors such as an ageing population and an increase in orthopedic disorders.
Acknowledgements:
RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)
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