The bid offers a 19.3 percent premium to the average share price in the past month and a 13.3 percent premium to Friday's closing price of 30.00 euros. "The value of the transaction, at the offer price of 34 euros per share, amounts to 214 million euros ($263 million). After accounting for Docpharma's net cash position and its own shares held by the Docpharma group, the enterprise value amounts to 193.85 million euros ($238 million)," both companies said in a statement.
Matrix said it would finance the deal through a combination of cash and bank borrowings. It said it would also consider raising funds in the capital market to reduce the bank borrowings after the transaction. It expects the deal to raise significant cost and revenue synergies.
Hyderabad-based Matrix Laboratories will soon merge with Strides Arcolab Ltd., creating a new firm valued at about $850 million. Docpharma -- founded in 1999 -- listed on Euronext Brussels in June 2001. It had 88.256 million euros in revenues for the first nine months ending on March 31, up 43 percent year-on-year.
Its earnings before interest, tax, depreciation and amortisation (EBITDA) grew 46 percent to 11.526 million euros in the same period. It generates most of its business in Belgium. UBS advised Matrix while ABN AMRO and Bank Degroof advised Docpharma.
