The deal to acquire Paras Pharmaceuticals, which owns brands such as Moov, D’Cold, Livon, is stuck on the pricing front as leading pharma majors like Dabur, Piramal Healthcare, Emami Glaxo, Marico, Sanofi-Aventis and Abbott scramble to secure the R500-crore Ahmedabad based company.
"Paras Pharma is asking for a valuation of around R3,500 to R4,000 crore, which is very high," says a senior official of the company, which is in the race to acquire Paras. "High valuation is the reason behind the delay in the deal," he adds.
Paras is well aware that its product portfolio is tempting for the suitors — which is the main reason behind high valuation, say industry sources. In Over the Counter (OTC) healthcare segment Paras has brands such as Krack, D’Cold, Moov and Livon, Setwet and Borosoft in the personal care segment.
Owning these brands would give a running start in the R8000-crore domestic OTC market. "Paras Pharmaceuticals has brands which are well established in the market," says Ajit Mahadevan, partner, life sciences practice, Ernst & Young. "Branding is a time and money consuming process and acquiring established brands saves time and money."
Piramal Healthcare, Dabur, and Emami already have presence in OTCs and buying Paras Pharma would enhance their portfolio. For multinational like Sanofi-Aventis and Abott, it is a shortcut into the lucrative OTC market.
Another reason behind the scramble for Paras is the lack of similar players up for grabs. "There are very few players like Paras Pharmaceuticals in Indian OTC sector which can be acquired," says an independent pharma consultant.