The Rs 1,400-crore company, Wockhardt, has acquired Dumex India, along with two of its leading nutrition brands - Protinex and Farex - from Royal Numico of The Netherlands in a bid to expand its presence in the nutritional segment.
Financial details of the deal were not disclosed. The two brands currently generate annual sales of Rs 60 crore and the deal size could be in the region of about Rs 100 crore.
“Acquisition of Protinex and Farex is a critical milestone in our growth plans in the nutrition business,” Wockhardt chairman Habil Khorakiwala said. According to the company, Protinex and Farex are a natural fit to the company's nutritional product range.
Their acquisition will see Wockhardt's nutrition products sale doubling to Rs 120 crore. Farex, a baby food brand well-known to Indian mothers was sold by Heinz to Royal Numico in the last one year.
Heinz had bought it from Glaxo more than 10 years ago when the global pharma giant got out of the food business worldwide.
Numico, within a short span of time has sold the brand to Wockhardt. Selling baby food and nutritional foods in India can be a tough business.
Companies are not allowed to advertise baby food so they rely on doctor's suggestions and advice. Wockhardt, which is in regular touch with doctors, for its prescription drug business, would be able to push the brand better.
Under the agreement, Royal Numico will also offer technical know-how to Wockhardt for manufacturing specialised sugar-free infant food products, currently marketed in India and internationally, under its brand names Dulac and Dupro. These brands are fast gaining acceptance in the Indian market. Presently, these products are imported from New Zealand and Malaysia.
Earlier this year, Wockhardt launched a new division called Wockhardt Speciality Nutrition to market disease-specific dietary supplements for patients on dialysis, ICU (intensive care unit) patients and diabetic patients.
Wockhardt claims that it is the market leader with a 15% share of the Indian nutrition market as per ORG-IMS. Wockhardt is also in talks with reputed global companies for in-licensing medical nutrition products suitable for the Indian market. The global market for medical nutrition is worth $32.5bn.
As part of the deal, Dumex's existing business, including its manufacturing facility and 235 employees will also be transferred to Wockhardt. Wockhardt will change the acquired company's name 'Dumex' within six months.
Protinex, acquired by Dumex from Pfizer in '02, is the market leader and the largest prescribed brand in its category, growing over 20% in volume in recent years. A growing over-the-counter segment of consumers has also emerged over the years, who consume the brand for everyday health.
Farex, is the third-largest selling infant nutrition formula in the cereals' categories. Wockhardt claims to be the only healthcare group in India to have its own modern spray-dry milk processing plant in Punjab, built to pharmaceutical standards.
It has a strong presence in infant nutrition with Dexolac, Nusobee and Firstfood brands, with annual sales of about Rs 60 crore.