By Amriteshwar Mathur
Zydus Lifesciences is attempting to move up the value chain in the global pharma industry with its expanding focus on the medical technology segment. As part of the above strategy, Zydus Lifesciences has made a foray in the higher margin orthopedic products segment with an acquisition of 85.6% stake in France-based Amplitude Surgical for Euro 256.8 million (nearly Rs 2,380 crore).
This transaction is at a valuation multiple, enterprise value to sales for year ended June 2024, of nearly 3 times. The France-based company also had EBITDA margins of 25.6 % for its financial year ended 30 June 2024, according to data sourced from its website.
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Acquisitions overseas by other large Indian pharma players have been done at diverse Enterprise Value (EV) to sales multiples (EV/Sales) – Sun Pharma had recently acquired US-based Checkpoint Therapeutics with a focus on solid tumor cancer for $ 355 million (nearly Rs 3,090 crore). The US-based company had sales of merely $0.04 million for nine-month ending September 2024.
Meanwhile, Dr Reddy’s in June 2024 acquired UK-based Haleon’s global portfolio in the nicotine replacement therapy segment outside the US market for about two times 12-month sales, based on annualizing data related to this product segment revenue provided by the Hyderabad-based company in its December 2024 quarter investor presentation.
For Zydus Lifesciences, the France-based acquisition comes at a time when the global orthopedic product segment is projected to grow from $ 45 billion in calendar year 2024 to $ 60 billion over the next five years. And this European pharma company is well established in the global hips and knees segment. The Ahmedabad-based company is looking to build a global medical technology business and this acquisition is a step in that direction.
The acquisition was announced on Monday and in Tuesday trade, the Zydus Lifesciences stock declined 1.2 % to Rs 889. The stock is trading not too far from its 52-week low of Rs 859 that was reached on 4 March 2025.
At the time of declaring its December 2024 quarter results, Zydus Lifesciences had highlighted its net cash position of Rs 3,091.6 crore, and to finance the French acquisition it will use a combination of internal accruals and external financing.
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