AGP CEO hints at more mergers and acquisitions

Company recently raised Rs2.8b from the stock market

Salman Siddiqui March 06, 2018
AGP product PHOTO:

KARACHI: AGP Limited, a pharmaceutical and healthcare products’ manufacturer, marketer and seller in Pakistan, has hinted at more acquisitions and/or mergers after it raised Rs2.8 billion at the Pakistan Stock Exchange (PSX) last month.

“Mergers and acquisitions are a continuous process [at AGP],” said AGP Limited Chairman Tariq Moinuddin Khan after the opening bell at the PSX on Monday.

AGP’s share price hit the upper limit of 5%, closing at Rs84 at the outset of trading on the first day of its listing at the bourse.

“We cannot disclose anything related to that [mergers and acquisitions] due to confidentiality…we will let you know when it [exactly] takes place,” he added.

“We have acquired [a total of] five companies in the last 10 years…all the five acquired companies were multinational companies.

“The idea is to transform it into a complete healthcare company having hospitals, clinics and pharmacies on its list,” Khan said.

“The search [for new companies] is on...history tells AGP, especially the OBS Group, has grown to the level on the basis of acquisitions and mergers,” said Kamran Nasir, chief executive at JS Global - the manager and consultant of the IPO.

The company sold 35 million shares (12.5% of total share capital) at Rs80 per share to foreign and local high net worth, institutional and individual investors through book building and initial public offering (IPO) in February. The IPO helped the company raise Rs2.8 billion.

AGP Limited is part of the OBS Group in Pakistan. Rigix, an anti-allergic medicine, is one of its popular products in circulation.

The company would start marketing a lifesaving drug for breast cancer, Hertraz, in the next couple of weeks, which would be available at half the price of those already available in the country. Besides, the company would soon start marketing medicines for the treatment of HIV aids and Hepatitis ‘C’, Khan said.

“The company may also opt for acquiring a product and technology  company (via using the raised money),” Khan revealed.

He elaborated that a large number of multinational companies have left Pakistan because of various reasons in the last decade, including taxes on import of raw material, technology and machinery and uncompetitive pricing regime.

“There were 70% foreign pharmaceutical companies and 30% local about 10 years ago in Pakistan. Now this ratio has turned to 30:70,” he said. The exit of multinationals has left a lot of people jobless. To avoid the situation, AGP has created a plan and turned to mergers and acquisitions.

“The plan advanced the company to the level of holding the IPO and getting listed at the stock exchange,” he said.

This listing is historic as a pharmaceutical company got listed on the PSX after a gap of 23 years, he said.

“At the next stage, we will do what our next door neighbour, India, has done to take it (AGP) globally with focus on exports and bringing in foreign exchange for the country, bringing-in latest technology, new medicines at an affordable price,” he said.

This was the second IPO of calendar year 2018. Earlier, Matco Foods was listed on the PSX.

Published in The Express Tribune, March 6th, 2018.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations