Piramal Enterprises looks to buy OTC business of Morepen Laboratories

• MUMBAI: New Delhi-based Morepen LaboratoriesBSE 9.48 % is in talks with Ajay Piramal Group to sell its OTC (over-the-counter) business of market leading brands such as Burnol as it plans to monetise some of its mainstream brands when larger rivals look to expand their consumer product portfolio. 
• Morepen has mandated Deloitte Touche Tohmatsu to run a formal process and negotiations are at an advanced stage, sources told ET. 
• "We have received interest from several contend including some of the large buyout funds and strategic players. However, talks with Piramal Group have advanced quite a bit. We hope to conclude the transaction within the next couple of months," said one of the sources. 
•  
• Piramal Enterprises, controlled by billionaire Ajay Piramal, has been a buyer in branded OTC product segment. In May, the company acquired four brands from US drug maker Pfizer for Rs 110 crore, its third such acquisition in nine months. 
• The company had in December 2015 acquired five OTC products of MSD Pharmaceuticals in the pain relief category for Rs 95 crore. A month earlier, it bought the brand Little, which sells various baby accessories across India. 
• Founded in 1985, Morepen has a wide range of front-ranking presence in the wellness category. Its spectrum of popular OTC products, such as Burnol, Lemolate and Sat Isabgol are leading brands in the respective categories. 
• When contacted, Piramal Group declined to comment, while Morepen did not immediately respond to an email seeking comments till the time of going to the press. 
• Burnol and Lemolate excelled in the OTC segment with a growth of 80 per cent and 57 per cent respectively in their first quarterly sales in FY 2016-17. Total sales from OTC products went up by 61 per cent at Rs 11.92 crore in Q1 FY 2016-17 vis-a-vis Rs 7.40 crore in Q1 FY 2015-16, its website showed. 
• Larger Indian companies such as Piramals and Dr Reddy's Laboratories are acquiring OTC brands in India and abroad to strengthen their presence. 
• "Our aim is to be a significant player in every business under the healthcare vertical of Piramal Enterprises Limited," said Nandini Piramal, executive director, Piramal Enterprises, while acquiring Pfizer brands in December. 
• "The consumer products division of the company currently ranks 7th in India, but we aim to be a top thre player in the OTC market by 2020. Acquisition is one of the important routes to help us achieve our goal," she said. 
• Meanwhile, Dr Reddy's acquired six OTC consumer healthcare brands from US drugmaker Ducere Pharma in May. Though estimates vary, OTC drugs are seen as a high growth segment. Its size has swelled to about $3 billion in 2015. 

Piramal enterprises, otc business, morepen laboratories