On Friday, shares of Laurus Labs gained over 7 percent to Rs 314 on NSE after the pharma firm announced that it has acquired a majority stake in Richcore Lifesciences.
In a stock exchange filing on 25 November, it said, "Laurus Labs has signed a definitive agreement to acquire 72.55 per cent of Richcore's shares from Eight Roads Ventures and VenturEast for a value of Rs. 246.7 crore."
Richcore is being valued at Rs 340 crore and the cost of acquisition will be Rs 246.7 crore and will be funded through internal accruals, it added.
The current promoters led by Subramani Ramchandrappa will continue to be on the executive board and run the operations. Post successful closure of the transaction, Richcore will be renamed to Laurus Bio Pvt. Ltd.
"This acquisition marks Laurus Labs' entry into the broader biologics and biotechnology segments, providing the company access to its high growth areas, globally and in India. With this acquisition, Laurus adds a fourth revenue stream to its three existing divisions - API, Formulations and Synthesis," it said.
Post the announcement Motilal Oswal maintained its "buy" rating on the stock and raised its target price to Rs 410.
"The acquisition is a step towards building a vertically integrated biotech segment and adds a new lever to growth. It particularly provides capabilities in high growth areas of Recombinant (Rh) Proteins, Enzymes and Biological Contract Development and Manufacturing Organization (CDMO)," the brokerage firm said.