Mumbai, Dec. 13: UK-based Reckitt Benckiser will acquire Paras Pharma for Rs 3,260 crore (£460 million).

Reckitt thus beats players such as Emami, Johnson & Johnson, Japan’s Taisho Pharmaceutical and GlaxoSmithKline Plc in the race for Paras.

The British consumer goods firm will purchase the stakes held by the Patel family, founders of Paras, and those held by the private equity firm Actis.

Reckitt’s acquisition of Paras will bring under its fold brands such as Moov, an analgesic pain ointment, D’Cold, a cold and flu remedy, DermiCool, which enjoys the second position in the treatment for prickly heat, Krack, the top medicated skin treatment for cracked heels, and Itch Guard and Ring Guard, both anti fungal creams.

Paras also has a personal care business led by Set Wet, a hair gel and deodorant brand.

Analysts said the price paid by Reckitt was on the higher side as it was over eight times Paras’s turnover. The huge opportunity in the Indian market had made Reckitt pay such a high price, they added. For 2009-10, Paras generated net sales of Rs 401 crore.

Commenting on the acquisition, Reckitt Benckiser CEO Bart Becht said, “The acquisition of Paras is another step forward in Reckitt’s growth strategy in consumer healthcare. It creates a material healthcare business in India, one of the most promising markets in the world, with the addition of a number of strong and leading brands.”

The Paras business not only has good growth potential but also supported by Reckitt’s investment and innovation.

Reckitt was advised by JP Morgan, while Actis and other Paras shareholders were advised by Morgan Stanley. Some of the brands in Reckitt’s portfolio include Lysol, Dettol, Vanish, Durex, Airwick, Harpic, Mortein, Veet, Nurofen, Clearasil, Strepsils and Gaviscon.

Blessing in disguise

News that Emami had lost the race to acquire Paras was well received by investors. On the Bombay Stock Exchange today, the Emami scrip spurted nearly 17 per cent, or Rs 59.70, to Rs 418.25. Its share price was under pressure because of concerns that a possible acquisition of Paras would impact its balance sheet as it would have to raise a lot of debt to fund the acquisition.