Jubilant Organosys completes acquisition of Hollister-Stier Laboratories

Jubilant Organosys Ltd on June 01, 2007 has announced the completion of the largest overseas acquisition in Contract Manufacturing by an Indian Company, through its purchase of Hollister-Stier Laboratories (Hollister).

The Company had first announced the Hollister acquisition on April 24, 2007. The transaction is effective June 01, 2007. The results of Hollister therefore will reflect in the Company's consolidated financials from Q1 FY 2008 onward.

The base purchase price of US$ 122 Million and the reimbursement for the capacity augmentation programme of US$ 18.7 Million has been financed through cash-on-hand from an earlier FCCB issue and also by leveraging Hollister's balance sheet. The transaction is attractively valued given Hollister's strong earning growth prospects.

Contract manufacturing of sterile injectables at Hollister, a robust and rapidly expanding operation by, itself has strengthened the Company's Pharmaceuticals & Life Science Products segment - further enhancing its position in the regulated markets. With a CAGR of over 40% for the past 4 years, this acquisition signifies an addition of a novel growth platform in the high-value & premium products space. Hollister also brings with it a stable and profitable Allergy business that has strong brand loyalty and has provided quality products and services for more than 85 years. The core management team of Hollister, which built this successful operation, led by Mr. Anthony D Bonanzino, will continue to manage and grow the business going forward.

Over 90% of Hollistier's contract manufacturing service revenues accrue from innovator pharmaceuticals Companies and the operation therefore adds further scale and depth to the Company's services capability in its CRAMS business. During CY 2006 Hollister recorded Operating Profit of US$ 10.9 million with Revenues of US$ 55 million. The outlook for the current year is significantly positive where the Company intends to further strengthen its CRAMS business with the addition of contract manufacturing of sterile injectable business.