Laurus has announced acquisition of 72.55% stake in Richcore Lifesciences, a Bangalore-based company for a consideration of Rs 2.5 bn, valuing Richcore at Rs 3.4 bn.

                               

Acquisition of Richcore to add new capabilities. Laurus has announced acquisition of 72% stake in Richcore Lifesciences for Rs 2.5 bn, valuing the business at ~6X FY2021 sales and 15X FY2021 EBITDA. The acquisition provides Laurus with fermentation capabilities and offers diversification into newer areas including recombinant products with medium-to-long-term target of building vertically integrated biotech CDMO. We like Laurus’ strategy of identifying new revenue streams even as the Richcore acquisition is small to impact the near-term earnings profile.

Laurus has announced acquisition of 72.55% stake in Richcore Lifesciences, a Bangalore-based company for a consideration of Rs 2.5 bn, valuing Richcore at Rs 3.4 bn. Richcore posted 1HFY21 revenues and EBITDA of Rs 291 mn and Rs 113 mn, implying a valuation of 6X FY2021 revenues and 15X FY2021 EBITDA (annualised). The acquisition will be funded through internal accruals and will be completed within three months. The current promoters will remain with the company and continue to run operations with Laurus buying out existing PE investors Eight Roads and VenturEast. Richcore provides Laurus with capabilities in fermentation-based products, animal-origin free recombinant products and offers potential entry into biotechnology CDMO space.