Adcock Ingram to buy Genop

Drug maker Adcock Ingram says it will acquire health products supplier Genop in a deal that will give it entry into the contact lens, surgical and skincare products market.

A market leader for 90 years, Genop specialises in surgical and pharmaceutical products in the ophthalmic, optometry, skincare, aesthetic and plastic surgery sectors in Southern Africa. The company generates about R400m in annual sales.

On Tuesday, Adcock Ingram said the deal — whose value has not been disclosed — was attractive as the EpiMax brand would form part of the deal.

“The brand is well established, with strong awareness among consumers and dermatologists,” it said.

Genop, which holds exclusive distribution rights for leading global brands, said on its website its future growth would be in eyecare, optometry, ophthalmology, aesthetic skincare and dermatology.

“Genop’s product portfolio has very little overlap with Adcock Ingram’s existing portfolio and allows for diversification into non-SEP [ single exit price]-regulated products in specialised areas or therapeutic categories,” Adcock said.

Over-the-counter medications are Adcock Ingram’s second-biggest contributor to revenue and the biggest contrib- utor to profit. In August, Adcock reported that it had turned its rest of Africa operations into a profitable business, contributing to a significant jump in net profit for the year to June 2017.

Overall, revenue rose 7%, to R5.96bn and taxed profit was up 213%, to R561m in the year to end-June.

The group declared a final dividend of 76c, taking its total for the year to R1.39, up 34%, from R1.04 in 2016.

Adcock said the Genop transaction was subject to regulatory approval.

GENOP’S PRODUCT PORTFOLIO HAS VERY LITTLE OVERLAP WITH ADCOCK INGRAM’S EXISTING PORTFOLIO

The group also said the deal did not require shareholder approval as it was not a categorised transaction in terms of the JSE rulings.

Bidvest owns about 37.5% of the pharmaceutical group, followed by the Public Investment Corporation with 22% and empowerment partner AdIzinyosi, with 14.7%.

Adcock Ingram’s share price was down 1.28% at R61.90 at close of trade. The pharmaceutical group has a market capitalisation of more than R11bn.