Logo of Saudi Pharmaceutical Industries and Medical Appliances Corp.
Saudi Pharmaceutical Industries & Medical Appliances Corporation (SPIMACO) signed on Nov. 13, sale and purchase agreements (SPAs) with some shareholders in Osmopharm to acquire 68% of Osmopharm and divest a 76.4% stake in SPIMACO Misr for Pharmaceutical Industries (SPIMACO Misr) via a share swap and a cash consideration.
The SPAs were signed with SIGMA Pharmaceuticals Industries (SIGMA), Bruno Scapinelli and Ahmed Abd El Monem Aly Habib, the Saudi-listed company said in a statement on Tadawul.
Under the SPAs, SPIMACO agreed to acquire a total of 68 shares in Osmopharm, at a total value of SAR 16.1 million.
SPIMACO will close the deal by transferring 171,973 shares in SPIMACO Misr (76.4% of the issued share capital) and paying CHF 800,000 (SAR 3.3 million) in cash.
Upon completion, SPIMACO will own 68 of Osmopharm, while SIGMA together with Ahmed Abd El Monem Aly Habib will own 76.4% of the issued capital of SPIMACO Misr.
Meanwhile, SPIMACO will have a put option to sell its remaining 14.2% shareholding in SPIMACO Misr with SIGMA having a call option.
The deal closure is subject to a number of preconditions, including obtaining approvals from the relevant regulatory agencies in Saudi Arabia and Egypt.
Pursuant to the terms of the SPAs, either SPIMACO or SIGMA may terminate the SPA if the conditions are not satisfied within 12 months from the signing date, the statement added.
The deal will be financed from the company’s own resources and comes as part of SPIMACO’s strategy to strengthen and expand its product portfolio, acquire new technology, reinforce its presence in the Kingdom and MENA region and extend its international reach.
Osmopharm recorded a net profit of SAR 4.2 million in 2022, while SPIMACO Misr incurred a net loss of SAR 4.7 million in the same year.
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Revenue, Profit/loss of Osmopharm, SPIMACO Misr (SAR mln) |
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|
Osmopharm |
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|
Year |
Revenue |
Net profit/ loss |
|
2020 |
77.8 |
6.8 |
|
2021 |
70.1 |
4.1 |
|
2022 |
63.1 |
4.2 |
|
SPIMACO Misr |
||
|
2020 |
3.7 |
(4.3) |
|
2021 |
5.1 |
(1.8) |
|
2022 |
2.6 |
(4.7) |
The strategic swap is expected to strengthen SPIMACO’s financials by consolidating Osmopharm’s financial results and reducing SPIMACO’s ownership in Egypt’s unit to a minority shareholding, the statement noted, indicating that no related parties are included in the deal.
SPIMACO will announce the completion of the transaction or any other material developments in due course.
Strategically, SPIMACO plans to diversify its product offerings by integrating Osmopharm’s advanced modified release (MR) technology into its facilities in Saudi Arabia through technology transfer. SPIMACO’s pipeline includes multiple medicines that can benefit from MR technology. This integration is expected to enhance the company’s portfolio, re-positioning it towards higher-value medications.
The advanced MR drug delivery method promises better efficiency, fewer side effects, and greater convenience, leading to better patient compliance. Such advantages should enable SPIMACO to secure a larger market share in the Kingdom.
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