Asahi Songwon acquires Atlas Life Sciences enters into the API business

Asahi Songwon Colors Limited, a market leader in the Indian pigments industry, announced the acquisition of 78 per cent stakes of Atlas Life Sciences Private Limited, a manufacturer of bulk pharmaceutical ingredients (APIs), for an all-cash consideration of Rs 48 crores.

Asahi Songwon Colors is a market leader in the Indian pigments industry,

The Board of Directors unanimously approved the acquisition, which includes a fully operational WHO GMP certified manufacturing facility in Odhav, Ahmedabad, a 4,000 square-foot state-of-the-art R&D facility, a 5,000 square-foot corporate office, and a 15,000-square-meter land parcel in Chhatral with EC permission for 32 products, for future expansion activities.

Atlas is a leading manufacturer of Anti-convulsant, Anti-psychotic and Anti-diabetic APIs with a strong focus on product and process research.

Key Highlights of the Transaction

• The 78 per cent acquisition of Atlas Life Sciences Private Limited will be financed through a mix of Rs 28 crores of internal accruals and Rs 20 crores of debt.

• Asahi Songwon Colors will acquire an additional 11 per cent stake in Atlas Life Sciences Private Limited each year for the next two years based on performance metrics, bringing the company's equity stake to 100 per cent by the end of FY25.

• Beginning Q1FY23, the existing plant will contribute to Asahi Songwon Colors Limited's consolidated financial results.

• Mr. Jagdish Sheth, the current promoter of Atlas Life Sciences Private Limited, will serve as a Joint Managing Director until March 2025.

• Asahi Songwon Colors will establish a new plant on the vacant land parcel in Chhatral to backwards integrate the existing products and introduce newer high-value products.

• The Company intends to break ground on the greenfield project in Chhatral in July 2022.

• The greenfield project is estimated to cost Rs 44 crores and will be funded through a combination of internal accrual and debt.