Cipla Quality Chemical Industries Ltd announced the completion of its acquisition by Africa Capitalworks SSA 3, a Mauritius-based investment vehicle, from India’s Cipla Limited, making Africa Capitalworks the new majority shareholder.
The transaction was valued at $25mn (Shs94.2bn), Cipla said in a Wednesday filing to Indian and Luxembourg stock exchanges. The sale was finalised on Tuesday, just days prior to the 10th anniversary of Cipla’s acquisition of the Ugandan drugmaker.
Cipla Quality Chemical Industries said it has secured from Cipla rights to the technology it needs to manufacture antiretroviral drugs and antimalarials to fulfil its business obligations. It has also been granted access to the vital technology and databases required to sustain its operations pending registration of its own such assets, and has entered into an agreement to continue to supply products to Cipla group companies for at least three years.
The drugmaker said it would drop Cipla from its name and revert to Quality Chemical Industries Ltd “as soon as practically possible.” The acquisition by Africa Capitalworks – first announced in March – will not result in any change in management, it added.
“This transaction marks a significant milestone as we embark on a new phase of collaboration with our new majority shareholder directed at increasing our growth and thereby strengthen the healthcare sector in the region,” Cipla Quality Chemical Industries said in a statement.
Cipla Quality Chemical Industries is primarily engaged in the manufacture and sale of pharmaceutical products with a focus on antiretrovirals, artemisinin-based combination therapies and hepatitis B drugs. It is also a distributor of other medical products and has licences to operate in 32 countries in sub-Saharan Africa. The company currently exports its products to 13 countries in Africa and two in south-east Asia.
Africa Capitalworks acquired a 51.18 per cent stake in the pharmaceutical company from the Indian pharmaceutical giant. Cipla Quality Chemicals Limited was established in 2005 as a joint venture between Cipla Limited and Quality Chemicals Limited, a drug importer and distributor founded in 1997 by four Ugandan businessmen and two foreign partners.
Cipla acquired a majority stake in the company on 20 November 2013, equivalent to 62.3 per cent of the company’s shares. This was reduced to 51.18 per cent when the company went public on the Uganda Securities Exchange in September 2018.
Africa Capitalworks SSA 3 is a holding vehicle set up by Africa Capitalworks Holdings to manage its investment in the drugmaker. The parent company is registered in Mauritius and provides equity capital and “complementary skills” to “sub-Saharan mid-market companies in strategically selected selectors that offer the potential to be transformed into local and regional industry champions.”
Africa Capitalworks Holdings is an investment vehicle of Capitalworks Group, the South African private equity fund. Its shareholders include the South African Government Employees Pension Fund, British Investment International (formerly CDC), and the African Development Bank.
Three of the Ugandan co-founders of Quality Chemical Industries — Emmanuel Katongole, George Mutebi and George Baguma — each acquired an additional 1.5 per cent of the shares, adding to the 8.4 per cent stake they collectively hold in the company. The additional 4.5 per cent stake will be held by the new majority shareholder on behalf of the trio.
($1 = Shs3767.13)
