Mumbai, May 16: Mumbai-based drug company Piramal Healthcare has snapped up Massachusetts-based healthcare information data provider Decision Resources Group for $635 million.
The transaction, which is the largest outbound deal this year, will give Piramal Healthcare ownership of high quality, web-based research, predictive analytics via proprietary databases and consulting services to the global healthcare industry, according to the company.
The deal is expected to close by the end of June and will be subject to regulatory approvals. It will be financed through an equal mix of debt and equity.
With revenues of $160 million in 2012, Piramal has paid about four times of the company’s expected sales this year.
Commenting on the acquisition, Piramal Healthcare chairman Ajay Piramal said, “The global healthcare industry is facing several challenges including rising research costs, lower drug approval rates, mounting regulatory pressures and increasing complex reimbursement models. The need for specialist information is critical and the demand in growing.
“We are very pleased to add the expertise of a world-class management team with deep understanding of this sector and nearly 300 analysts with a strong record in their field,” added Piramal.
Decision Resources Group largely caters to three key market segments. These include the biopharma business unit that provides reports on drug utilisation trends, the market access unit that offers analytical services on a product’s acceptance in the market and the medical technology business that focuses on the medical device markets. According to Piramal Healthcare, these three market segments are worth $2.5 billion.
“Decision Resources Group is one of the fastest growing companies in the $5.7 billion global healthcare information industry,” according to a statement by Piramal Healthcare.
Decision Resources has shown a compounded annual growth rate of 20 per cent for the last five years and 48 of the top 50 global pharmaceutical companies are its customers, the statement said.
After the acquisition, Piramal will operate the Decision Resources Group as a stand-alone business with the existing senior management team.
The Piramal group, whose other businesses include Piramal Glass, Piramal Realty and drug discovery company Piramal Life, has been seeking opportunities in research and development ever since it sold its formulations business to US-based Abbott Laboratories for $3.7 billion in 2010. Last year, the group bought a 5.5 per cent interest in Vodafone’s India unit for $640 million and increased that to 11 per cent earlier this year.
Shares of Piramal Healthcare rose over 1 per cent on the Bombay Stock Exchange in early morning trade but closed lower by 0.95 per cent at Rs 427.60.