Johannesburg – Ascendis Health [JSE:ASC] has finalised a number of European acquisitions in recent months which are expected to boost profit margins in 2018.
This is according to a statement issued by the JSE-listed pharmaceutical company on Monday. The company unpacked its two new European acquisitions.
Recently Ascendis Health had concluded its acquisition of Cipla Agrimed SA and Cipla Vet SA for R375m. This acquisition officially became unconditional on June 1 and is expected to help Ascendis expand into the veterinary pharma market and assist the company’s international strategy through expansions into new African markets.
The acquisition of Eastern European Sunwave Pharma SRL for €16.35m (R234.34m) and NHP Natural health Pharma Ltd for between €26.1m (R374.09m) and €49.1m (R703.74m) came into effect on June 2.
Sunwave which is in the nutritional health market is one of the largest players in the Romanian market. According to Ascendis chief executive, Dr Karsten Wellner, the acquisition will help the group gain a foothold in Eastern Europe.
This follows the acquisition of Remedica Holdings, based in Cyprus, and European-based sports nutrition business Scitec International for €430m (R6.1bn), last year.
“We are happy to be bulking up our presence throughout high growth areas in Europe and emerging markets after having already gained traction in 2016 via the acquisitions of Scitec in Hungary and Remedica based in Cyprus focussing on pharma in emerging markets,” said Wellner.
Sunwave and NHP Pharma will be treated as a single business, under the name “Sunwave”.
Wellner explained the group could extract an Ebitda margin of approximately 20% from the acquisition.
Sunwave’s founder Yogish Agarwal expressed delight in the deal. “We are very excited about this deal. This opens new growth opportunities for Sunwave in Romania and to its international aspirations.”
Ascendis’ foreign operations have contributed 43% of the group’s total sales, according to the interim results for the half-year ended on December 31, 2016.
Wellner added that Sunwave could boost foreign revenues by approximately 15%.
The share was trading0.69% weaker at R24.33 by 12:03 on the JSE.Read Fin24's top stories trending on Twitter: Fin24’s top stories