Natco Pharma has acquired the assets of SaveMart Pharmacy, a multi-utility drug store based in Lancaster county, Pennsylvania in the United States.
The acquisition is valued at about $3.45 million plus the cost of inventory with the shops, said Rajeev Nanapaneni, director, Natco Pharma.
Based in Lancaster, Pennsylvania, SaveMart had sales of US$18mn last year and sells pharmaceutical products, vitamins and health and beauty aids.
The acquisition of SaveMart was done through Natco Pharma Inc., the Delaware-based wholly-owned subsidiary of Hyderabad-based Natco Pharma. The deal was funded through a mix of internal accruals and debt.
Natco Pharma said it was planning to establish its retail business in the US. It plans to clock US$100mn revenues from the retail business in the US over a period of time.
"More than 75% of the pharmacy business in the US constitute low priced generics, where margins are very less. If we could scale up a significant share of this business to the tune of $100-120 million in near future through acqisition of pharmacies, that could provide us more margins in the business", Rajiv Nanapaneni said.
With two acquisitions, net accretion to the company's topline would be around US$28mn in the first year of operations.