Indian drugmaker Strides Arcolab is selling its operations in Australia and Asia and will take a stake in the purchaser, Genepharm Australasia.

Genepharm is paying A$65 million, or around $58.2 million, for Strides' operations across the region. The firm manufactures and distributes generics and over-the-counter products and sales for the year to June 30, 2008 (derived in Singapore, Malaysia, Thailand, Vietnam, Hong Kong and Australia) are expected to be in the region of A$32.5 million. Earnings before interest, tax, depreciation and amortisation will come in at around A$7.4 million.

For its part, Strides has increased its stake in Genepharm from 2.1% to 19.8% and once the transaction has been completed, the Indian firm will have a 55% interest in the expanded capital base of the Australian group. The combined regional businesses are expected to have revenues of approximately A$100 million and Genepharm said the acquisition would be earnings per share accretive, before synergies.

Arun Kumar, Strides’ managing director, said that Genepharm's sales and marketing expertise will help accelerate the growth of the Australian and Asian businesses. Combined with Strides' “manufacturing strength and product offering, we are confident that this will prove to be a successful partnership that will create value for the shareholders in both companies”, he added.

Genepharm chief executive Dennis Bastas said the pact represents an excellent opportunity for his firm “to build scale and diversity…to create a premium healthcare business".