By IANS
Bangalore : Biocon Ltd, India's leading biotechnology firm, has decided to divest its enzymes business vertical to Novozymes A/S of Denmark for $115 million (Rs.4.7 billion) in an all-cash deal.
A top Biocon official told IANS here Wednesday that the Danish firm would pay $102 million (Rs.4.13 billion) by October this year and the balance over a period of 10 years.
"Of the total 160 employees working in the enzymes unit, 150 will be absorbed by Novozymes. The unit contributed Rs.950 million to the company in the last fiscal (FY 2006-07)," the official said.
Biocon has appointed Allegro Capital Advisors as the investment banker for the transaction, which is expected to be completed by the third quarter of this fiscal.
As a global leader in bio-innovation, Novozymes provides bio-solutions and markets about 700 products in 130 countries.
Post-divestment, the enzyme business will be integrated into Novozymes South Asia Ltd, a fully owned affiliate of the parent firm. The vertical includes a range of industrial enzymes, food additives and process aids.
"Production and formulation of enzymes will, however, continue at our site under lease and service agreements with Novozymes," the official added.
Earlier, in a statement Biocon said it was exiting from enzymes to focus on its core bio-pharmaceuticals business verticals such as APIs, biologicals and proprietary molecules.
"We believe this is the right time to divest our enzymes business and focus on bio-pharma business in which we see a high growth trajectory due to the investments made over the last decade to build proprietary know-how," Biocon chairperson Kiran Mazumdar-Shaw said.
Novozymes CEO Steen Riisgaard said the acquisition would strengthen his company's presence in the Indian market, which has an attractive growth potential.
"The buyout will be a strategic fit to our existing enzymes business in view of the synergistic market opportunities in the subcontinent," Riisgaard noted.