Eris Life up 4%; Citi sees potential to unlock synergies post acquisition of Strides India biz
Pharma firm Eris Lifesciences share price gained 4 percent intraday Tuesday, in addition to 7 percent rally in previous session as global brokerage house Citi sees potential to unlock synergies on various fronts post acquisition of Strides India business.
While having a buy call on the stock with a price target of Rs 700 per share, the brokerage house said the deal is positive but awaits more colour on the future and from the management.
Margin post acquisition of Strides’ India branded generic business may be on the lower side but company’s high cash balance & cash generation implies lower bar for EPS accretion, it added.
Eris Lifesciences signed a definitive agreement on last Saturday to buy India branded generics business of Strides Shasun for an aggregate cash consideration of Rs 500 crore.
The transaction is expected to close by November 30th, 2017.
Strides’ India branded generics business comprises of a portfolio of 130 plus brands in the domains of neurology, psychiatry, nutraceuticals and gastro.
As per the terms of the agreement, Eris will acquire the marketing and distribution rights for the said portfolio of products in India, along with the employees forming part of the business. Strides will retain the global rights to the products.
At 15:00 hours IST, the stock price was quoting at Rs 644.65, up Rs 20.35, or 3.26 percent on the BSE.