Jubilant Organosys plans to buy Draxis Health for US$ 255 million

Jubilant Organosys, an India-based integrated pharmaceuticals industry player, has informed that it will buy 100% stake in Canadian drug producer Draxis Health Inc. through its wholly-owned subsidiary for US$ 255 million (Rs 1,020 crore).

Draxis Health sells sterile products including liquid and freeze-dried injectables and sterile ointments and creams; non-sterile products like solid oral and semi-solid dosage forms; and radiopharmaceuticals. The company, with it current strength of 500 employees, has its manufacturing operations in Montreal.

The company will acquire all the outstanding common shares of Draxis at a price of $6.00 per share in cash by way of a plan of arrangement. The purchase price is at a 22.4% premium over Thursday’s closing price of Draxis shares on Nasdaq.

Jubilant plans to fund the acquisition through a combination of cash-in-hand and $155-million debt.

Last year, Jubilant bought Spokane, Washington-based Hollister-Stier Laboratories, a contract manufacturer of sterile injectible vials, for US$122.5 million.

Bank of America Securities Canada acted as the financial advisor to Draxis and McCarthy Tétrault LLP is legal counsel to Draxis. Lazard acted as financial advisor to Jubilant while Osler Hoskin & Harcourt LLP is the legal counsel.

The proposed transaction is expected to close in the second quarter of 2008, shortly after receipt of shareholder and regulatory approvals.