Ascendis makes yet another acquisition

Health and care brands group Ascendis Health announced on Thursday that it has acquired the pharmaceutical business of Akacia Healthcare for R345m.

Akacia manufactures and distributes branded generic prescription, over-the-counter and complementary medicines, including probiotic brand Reuterina as well as cold and flu brands Sinucon and Sinuend.

According to Ascendis Health CEO Dr Karsten Wellner, following the recent acquisition of Spanish pharma company Farmalider and 85 registered product dossiers from Sandoz, the Akacia acquisition will create significant scale for the Ascendis Pharma division and create a strong platform for expansion.

The transaction includes Akacia Pharma’s 23 000m² manufacturing facility in Isando, Johannesburg, which is valued at R100m. Wellner said the manufacturing plant has significant spare capacity, which will enable Ascendis to increase local production of its existing pharmaceutical and complementary medicine ranges.

“This aligns with our vertical integration strategy aimed at creating synergies between our businesses which will improve margins. Local manufacture will also reduce our foreign exchange exposure and enable us to tender for state contracts which favour local manufacture,” he explained.

Akacia also manufactures pharmaceutical products for third parties under contract licencing agreements.

In the year to July 2015 Akacia Pharma generated earnings before interest and tax of R38m, from a net asset value of R215m.

The acquisition is subject to regulatory and competition approvals.

- Source: Fin24