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Thursday, March 29, 2012

Ahlcon Parenterals (India) Ltd:Buy/sell/growth prospects and recommendation,news and results,target and analysis,view and outlook,multibagger

Scripscan:Ahlcon Parenterals (India) Ltd

Story:Delhi-based Ahlcon is a two-decade-old firm engaged in the business of parenterals and manufacturers life-saving intravenous fluids and medical disposals.Ahlcon has an installed capacity of 30 million bottles per annum for large-volume parenterals besides 150 million vials of eye drops and injections – both in transparent and white opaque packs – as small volume parenterals. It has a manufacturing unit at Bhiwadi at Rajasthan. The promoter group, led by Bikramjit Ahluwalia, holds 70.9 per cent stake in the company.German healthcare products major B Braun is acquiring majority stake in public-listed formulations and healthcare consumables firm Ahlcon Parenterals (India) Ltd in a deal valuing the company at Rs 331 crore ($65 million).Braun has come up with an open offer to buy 1.87 million shares comprising 26 per cent stake from the public at Rs 460 a piece. This is 10 per cent premium to the last-traded share price of Ahlcon.As per the share purchase agreement, Braun will acquire shares from the promoters and the public to pick up to 75 per cent stake in the company. If the open offer is not too successful and it manages to garner just about 4 per cent or less stake from the public, it would buy out the entire holding of the promoters.This means the promoters will sell out anywhere between 49 per cent and 70.9 per cent of their holding to Braun as a part of the transaction. Given this, Braun will pay the promoters anywhere between Rs 162 crore and Rs 235 crore. Therefore, in total, Braun could end up paying around Rs 250 crore ($50 million).Ahlcon had revenues of Rs 78.65 crore, with net profit of Rs 5.77 crore for trailing four quarters ended December 31, 2011. In the same period, the firm had EBITDA of Rs 14.46 crore. This means Braun has valued Ahlcon at 23x its trailing EBITDA and over 57x its trailing net profit, as per the estimates.I am really not sure what tempted the German major to go for such a massive premium(ahlcon used to trade at mid 60 levels even same time last year).I congratulate those investors who have been patient in this counter for years and now reaping the mind-boggling gains.To conclude,I would like to caution by penning few of the notable examples which got taken over previously and now are trading at 1/4-1/5 of the acquired levels.Camlin got acquired by kokuyo and open offer came at 110 bucks but it quotes presently in the 30's.AP Paper was taken over by US-based International Paper Holding and they gave an open offer at 544 bucks.The scrip presently trades at mere 180 levels.So who knows history can well get repeated in ahlcon too.

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