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Hikma expands in the Tunisian market

Hikma Pharmaceuticals PLC (“Hikma”) (LSE:HIK) (NASDAQ : HIK), the fast growing group, announces that it has agreed to increase its interest in Industries Pharmaceutiques Ibn Al Baytar, a Tunisian manufacturing and company, to 66% of the issued share-capital through the purchase of shares from existing shareholders. Hikma will pay a consideration of $ 5 million for the additional interest which will be satisfied from existing cash resources.

Ibn Al Baytar and its 100% owned subsidiary Medicef together operate two manufacturing plants in Tunisia – one for general formulation and one for anti-infectives. The companies have a combined sales force of 23 representatives covering the Tunisian market and sell 41 products in 78 dosage strengths and forms. In 2009, the combined companies had revenues of $16.6 million.

The Tunisian pharmaceutical market grew by 15.6% in 2009 to reach $655 million in value terms. With a population of just over 12 million people, the Tunisian market offers excellent growth opportunities.

Through this transaction, Hikma:

  • Increases its share of the fast growing Tunisian market to approximately 3% and becomes the 9th largest pharmaceutical company in Tunisia[1]
  • Enhances its sales and marketing presence in Tunisia, increasing the number of sales representatives from 39 to 62
  • Strengthens its footprint in region, adding local manufacturing capacity in this important North African market
  • Adds an attractive range of products covering a number of therapeutic categories including cardio-vascular and respiratory

Hikma will assume control of Ibn Al Baytar, will consolidate its results and will appoint a majority of the board. We expect this acquisition will be accretive in the first year of consolidation.

Said Darwazah, CEO of Hikma, commented:

“Through our existing investment, made in 1994, Hikma has known Ibn Al Baytar and its management team well for many years. The opportunity to increase our stake and take control is highly attractive to us given the excellent growth prospects for the Tunisian market. This acquisition will enable us to accelerate our penetration of the Tunisian market and provides a great platform for exporting to neighbouring and French speaking African countries. I look forward to working more closely with Ibn Al Baytar’s experienced and successful team. At the same time, we continue to pursue actively a number of other value-creating acquisition opportunities using our unique market insight and industry contacts.”

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