Ascendis acquires Akacia Healthcare in R345m deal

JSE-listed health and care brands group Ascendis Health has inked a R345-million deal to acquire 100% of Akacia Healthcare’s pharmaceutical business, subject to regulatory and competition approvals.
 
Akacia manufactured and distributed branded generic prescription, over-the-counter and complementary medicines, with leading positions in several pharmaceutical market segments.

Akacia also manufactured pharmaceutical products for third parties under contract licensing agreements. The company’s product range included probiotic brand Reuterina, as well as Sinucon and Sinuend.

The transaction included Akacia Pharma’s 23 000 m² Medicines Control Council-certified manufacturing facility in Isando, Johannesburg, which was valued at R100-million. The facility was also certified as a good manufacturing practice site.  

Ascendis Health CEO Dr Karsten Wellner noted that the manufacturing plant had significant spare capacity, which would enable the company to increase local production of its existing pharmaceutical and complementary medicine ranges.

He added that, following the recent acquisition of Spanish pharma company Farmalider and 85 registered product dossiers from Sandoz, the Akacia acquisition would create significant scale for the Ascendis Pharma division.
 
“This will certainly elevate our presence in domestic and international pharma markets and create a strong platform for expansion. We will also gain access to lucrative new channels, such as retail pharmacy and prescribing doctors, and add further well-established branded generics with strong margins to our portfolio,” Wellner pointed out.
 
He believed the acquisition also aligned with Ascendis’s vertical integration strategy aimed at creating synergies between our businesses which would improve margins. “Local manufacture will also reduce our foreign exchange exposure and enable us to tender for State contracts, which favour local manufacture,” he said.
 
In the financial year ended July, Akacia Pharma generated earnings before interest and taxes of R38-million, from a net asset value of R215-million.