Jubilant buys Hollister for $122 m | business | Hindustan Times
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Jubilant buys Hollister for $122 m

Jubilant Organosys, one of the largest CRAMs companies in India has acquired the US-based Hollister–Stier Laboratories for $122.5 million, reports Arun Kumar.

business Updated: Apr 25, 2007 02:59 IST
Arun Kumar

In an all-cash deal, Jubilant Organosys, one of the largest custom research and manufacturing service (CRAMs) companies in India has acquired the US-based Hollister–Stier Laboratories for $122.5 million.

Hollister–Stier is the leading contract manufacturer of sterile injectable vials and lyophilisation products and one of the world’s leading producers of allergenic extracts. It is one of North America’s leading immunotherapy and vaccine companies, in the business for 85 years and with a strong brand loyalty. It has a high-end allergy extracts and products business, which is the second largest in the US.

“Jubilant Organosys is a leader in CRAMs space, delivering high growth performance by servicing the global pharma and life sciences industry. It has been our strategy to rapidly expand our global CRAMs business by investing organically and acquiring entities that complement our ambition to further accelerate our growth in this area,” said Shyam S Bhartia, chairman and managing director, and Hari S Bhartia, co-chairman and managing director, Jubilant Organosys, in a statement.

“The management of Hollister-Stier is extremely excited by this acquisition, which further strengthens our position in the contract manufacturing industry. This allows us to continue our high rate of growth in the business and maintain our presence as one of the largest producers of allergenic extracts,” Anthony D Bonanzino, president and CEO, Hollister-Stier, said. In 2006, Hollister–Stier reported revenues of $55 million with normalised EBITDA of $10.9 million. Over the last four years, the company posted a 40 per cent compounded annual growth rate in revenues.

The acquisition is on a debt-free, cash-free basis. The purchase price for the existing business at $122.5 million in cash values the transaction at under 11.2 times Hollister–Stier’s earnings of 2006. Jubilant Organosys will also reimburse the $16 million capital expenditure incurred for capacity expansion through March 2007 and some capital expenditure incurred by Hollister–Stier until the date of closing of the transaction.

Hollister–Stier has already embarked upon an expansion plan. Its capital expenditure programme is expected to complete in first quarter of 2008, and it will significantly enhance capacities and performance.