by Stefan Wagstyl
Hikma Pharmaceuticals, the fast-growing Jordan-based drugs group hard hit by the Arab Spring, is trying to capitalise on the opportunities created by the political turmoil. Late on Monday it announced plans to buy a $111.2m controlling stake in Morocco’s Societe de Promotion Pharmaceutique du Maghreb (Promopharm) to secure access to one of the Arab world’s more promising markets. London-listed Hikma (LSE: HIK) said in a statement it was purchasing 63.9 per cent of the company from the managers, institutions and related parties and making a tender offer for the rest of the stock. Spelling out the advantages of the deal, Hikma said: Acquisition of Promopharm, the ninth largest manufacturer of pharmaceuticals in Morocco with a 3.5% market share. Delivers a substantial local manufacturing presence in Morocco, the fourth largest pharmaceutical market in MENA, and completes Hikma’s footprint in the region.
Brings more than $45 million in annual revenue and offers significant growth potential within Morocco from its portfolio of high quality branded generics and in-licensed products. Provides an excellent distribution platform for launching Hikma’s leading strategic products in the Moroccan market. Creates opportunities to export Promopharm’s product portfolio to Hikma’s existing markets, leveraging Hikma’s extensive sales and marketing operations across MENA, and to develop Hikma’s presence in West African markets. Expected to be earnings accretive in the first full year. Said Darwazah, CEO of Hikma said in the statement: Entering the Moroccan market has been a strategic priority for Hikma for some time and we are delighted to have acquired a company that offers such an excellent fit with our long term growth objectives. Establishing ourselves as a local manufacturer in Morocco completes our MENA footprint and strengthens our leading position in the region. …We will continue to pursue further value enhancing opportunities across our operations. Darwazah told Reuters that Hikma was “actively looking” in Sudan, Egypt and other countries. Despite a 7p gain on Tuesday in London to 570.5p, Hikma’s shares are nearly a third down on the year, due to the political dislocation in North Africa and the Middle East. But that doesn’t seem to be stopping the company.
