Mumbai : Sun Pharmaceutical Industries Ltd has inked definitive agreements to acquire 85.1% stake in Russian company, JSC Biosintez, for $24 million, a move aimed at increasing presence in Russia through local manufacturing capability.

As part of the deal, Sun Pharma will also assume a debt of approximately $36 million of JSC Biosintez, the company said in a stock exchange filing.

JSC Biosintez, which focuses on the hospital segment, had revenue of $52 million in 2015. It has a manufacturing facility in Penza region with capabilities to manufacture a wide variety of dosage forms including pharmaceuticals for injections, blood substitutes, blood preservatives, ampoules, tablets, ointment, creams, gels and suppositories, as well as active pharmaceutical ingredients.

“This acquisition is consistent with Sun Pharma’s philosophy to invest in strategic emerging markets. This transaction gives us access to local manufacturing capability across multiple dosage forms in Russia, enabling us to serve the Russia pharmaceutical market more effectively," Aalok Shanghvi, head of emerging markets at Sun Pharma, said.

“This is a small size acquisition for Sun Pharma. Having local manufacturing capacity will increase the company’s presence in Russia and also help in meeting future regulatory requirements in that market. Russia is a big but challenging market, particularly in terms of sharp currency fluctuations," Ranjit Kapadia, senior vice-president at Centrum Broking, said.

The Russian pharmaceutical market recorded sales of $10 billion in the twelve months ended September, 2016, according to US-based healthcare information provider IMS Health.

The transaction, expected to be completed by end of 2016, is subject to approval of the Russian Federal Anti-Monopoly Service and other closing conditions, Sun Pharma said in the filing.

Russia is part of Sun Pharma’s emerging markets’ business. While the company does not share country specific details, total revenue from emerging markets stood at $548 million in 2015-16, down 10% from the previous year, mainly due to adverse currency movements.

Last month, Sun Pharma announced acquisition of US-based eye care specialist Ocular Technologies Sarl for an upfront payment of $40 million.

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