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Saudi Pharmaceutical Industries & Medical Appliances Corporation (“SPIMACO”) announces the signing of sale and purchase agreements (SPA) with shareholders in Osmopharm S.A. (“Osmopharm”) to acquire 68.0% in Osmopharm and divest 76.4% in SPIMACO Misr for Pharmaceutical Industries S.A.E. (“SPIMACO Misr”) by way of share swap and against a cash consideration to be paid by SPIMACO
| Element List | Explanation |
|---|---|
| Introduction | SPIMACO announces the signing of sale and purchase agreements (SPAs) on 13/11/2023G corresponding to 29/04/1445H with certain shareholders in Osmopharm (SIGMA Pharmaceuticals Industries (“SIGMA”), Bruno Scapinelli, and Ahmed Abd El Monem Aly Habib) to acquire shares equal to 68.0% in Osmopharm and to divest a shareholding of 76.4% in SPIMACO Misr for Pharmaceutical Industries S.A.E. (“SPIMACO Misr”) by way of share swap and against a cash consideration to be paid by SPIMACO. |
| Transaction Details | Pursuant to the SPAs, SPIMACO has agreed to acquire a total of 68 shares in Osmopharm (representing 68.0% of the share capital of Osmopharm) with a total value of SAR 16.1 million. SPIMACO will be acquiring those shares by a combination of transferring 171,973 shares in SPIMACO Misr (representing 76.4% of the issued share capital of SPIMACO Misr) and for a cash consideration of CHF 800,000 (equivalent to SAR 3.3 million). Following completion of the Transaction, SPIMACO will own 68.0% in Osmopharm, and SIGMA, together with Ahmed Abd El Monem Aly Habib, will own 76.4% of the issued share capital of SPIMACO Misr. SPIMACO will have a put option to sell its remaining 14.2% shareholding in SPIMACO Misr (and Sigma will have a call option). |
| Transaction Value | 16.1 million SAR |
| Transaction Terms | The completion of the deal is subject to a number of preconditions mentioned in the SPAs, including obtaining approvals from the relevant regulatory agencies in KSA and Egypt. Pursuant to the terms of the SPAs, either SPIMACO or SIGMA may terminate the SPA if the conditions are not satisfied within twelve (12) months from the date of the SPAs. |
| Parties of the Transaction | • SPIMACO • SIGMA • Bruno Scapinelli • Ahmed Abd El Monem Aly Habib |
| Transaction Funding Method | The transaction will be financed from the company’s own resources. |
| Transaction Execution Date | 2023-11-13 Corresponding to 1445-04-29 |
| Description of the Business of the Asset forming the Subject Matter of the Transaction | Osmopharm is a Swiss pharmaceutical Company, founded in 1994, and specializes in the development and production of modified release solid oral form drugs in pellets, tablets and resinate. It currently collaborates with around 70 clients in 30 countries across Europe, Middle East and North Africa, Asia, and South America. SPIMACO Misr is an Egyptian pharmaceuticals manufacturer with a production site near Alexandria producing therapeutic drugs for the Egyptian market. |
| Financial Statements for the Last Three Years of the Asset forming the Subject Matter of the Transaction | Osmopharm Revenue: 2022: SAR 63.1 million (CHF 15.2 million) 2021: SAR 70.1 million (CHF 16.9 million) 2020: SAR 77.8 million (CHF 18.7 million) Net Profit/Loss: 2022: SAR 4.2 million (CHF 1.0 million) 2021: SAR 4.1 million (CHF 1.0 million) 2020: SAR 6.8 million (CHF 1.6 million) (Exchange rate: CHF/SAR = 4.1581 as of 12 November 2023) SPIMACO Misr Revenue: 2022: SAR 2.6 million (EGP 21.2 million) 2021: SAR 5.1 million (EGP 41.8 million) 2020: SAR 3.7 million (EGP 30.1 million) Net Profit/Loss: 2022: SAR -4.7 million (EGP -38.6 million) 2021: SAR -1.8 million (EGP -14.9 million) 2020: SAR -4.3 million (EGP -35.3 million) (Exchange rate: EGP/SAR = 8.2283 as of 12 November 2023) |
| Transaction reasons | This transaction comes as part of SPIMACO’s strategy to strengthen and expand its product portfolio, acquire new technology and reinforce its presence in KSA / MENA region and extend its international reach. |
| Expected Impact of the Transaction on the Company and Its Operations | Osmopharm’s is active in the growing extended release (‘XR’) drugs market (part of modified release, ‘MR’, concept), which sees a growth rate of approximately 11% annually in the Western oral XR sector (valued around USD 9 billion). The oral XR market in Saudi Arabia, and MENA overall, although smaller at approximately USD 500 million, is more dispersed, indicating a promising potential for market consolidation (Source: IQVIA). Strategically, SPIMACO plans to diversify its product offerings by integrating Osmopharm’s advanced modified release technology into its facilities in Saudi Arabia through technology transfer. SPIMACO’s pipeline includes multiple medicines that can benefit from the MR technology. This integration is expected to enhance the Company’s portfolio, re-positioning it towards higher-value medication. 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 KSA. Furthermore, the acquisition streamlines SPIMACO’s access to Osmopharm’s Common Technical Document (CTD) capabilities, thus facilitating product registrations for entry into European and other international markets. This also presents the opportunity to manufacture SPIMACO’s products at Osmopharm’s EU Good Manufacturing Practice (GMP) certified unit in Switzerland. SPIMACO targets to support Osmopharm in creating a European portfolio by funding Bioequivalence (BE) studies and crafting in-house dossiers. This would assist Osmopharm in transitioning from a Contract Manufacturing Operations (CMO) company to a fully-fledged European pharma entity. SPIMACO intends to further support these efforts by expanding and refining Osmopharm's commercial team. Additionally, SPIMACO aims to undertake initiatives to optimize the product mix and cost structure, aiming to elevate Osmopharm’s margins to match those of their CMO counterparts. The strategic swap is expected to strengthen SPIMACO’s financials by consolidating Osmopharm’s financial results and reducing SPIMACO’s ownership in SPIMACO Misr to a minority shareholding. |
| Related Parties | None |
| Additional Information | SPIMACO will announce the completion of the transaction or any other material developments in due course. |
| Attached Documents |  |
The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.
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