Torrent Pharma in talks to acquire Encore's derma business for Rs 350 crore

AHMEDABAD: In line with its strategy to grow inorganically, Torrent Pharmaceuticals Limited is close to sealing a deal to acquire the dermatology business of Mumbai-headquartered Encore group. Market sources peg the deal size at upwards of Rs 350 crore.

Promoted by Merchant family, Encore Group is engaged into specialty pharmaceutical business for over 50 years. The group's derma division has combinations and formulations in categories as topical steroids, skin cleaning lotions, moisturising creams amongst others.

E-mailed queries sent to both Torrent Pharma and Encore group did not elicit any response.

Analysts say that the acquisition of derma business makes sense as Torrent has little presence in dermatology space. In fact, Torrent itself saw a huge growth in derma business among others. "The cardiac, CNS, anti-diabetic, dermatology markets have been growing much higher than the Indian pharma market among the major therapies in the past one year," the company had said in its annual report for 2013-14. The company also envisaged investments in dermatology and oncology segment.

After acquiring Elder Pharma in early 2014, Torrent Pharma showed keenness to make more acquisitions for growth.

The acquisition of derma business of Encore group provides Torrent Pharma access to global market also. Encore group has approvals to export its products to US and Australia and has presence in countries such as Canada, China, Vietnam, Nepal, Thailand, Vietnam to name a few. Encore is also into the business of contract manufacturing and offers product development support and has its facilities at Ahmedabad, Aurangabad and Indore, where it manufactures creams, ointments, lotions and solutions.