Pinewood sold to Indian drug group for €150m

Tipperary businessman Michael Costello has sold his generic drug company Pinewood to Indian group Wockhardt in a deal that values the Irish company at $150 million (€117.88 million).

Pinewood's 359 staff were told of the transaction at a meeting last night, which took place around the same time as Wockhardt notified the Indian stock exchange of its acquisition.

The main beneficiary of the deal will be Mr Costello, who set up Pinewood in 1976. He made it clear last night that the new owners of the business will continue to operate its existing manufacturing plant in Ballymacarbry, near Clonmel in Co Tipperary.

"Wockhardt represents a good partner for the business going forward. This transaction provides Pinewood with a platform to further develop and expand the business," he said.

"Pinewood's liquids and creams manufacturing plant strongly complement Wockhardt's existing injectable and solid dosage facilities," he said. "In addition, Wockhardt's large research team will substantially add to the portfolio of products that can be manufactured in Pinewood's plant in Ireland."

With sales of more than $70 million in the year to June 2006, Pinewood is the biggest manufacturer of generic products in Ireland. A generic pharmaceutical product can be made and sold by any drug group because the product's patent has expired. Unlike drugs that are still under patent, they are typically sold without a brand name.

Mr Costello said the takeover would consolidate Pinewood's position in Ireland and enable it to provide a bigger portfolio of products. Wockhardt has a market capitalisation of more than $1 billion and its headquarters are in Bombay (also known as Mumbai). The Pinewood deal is its fourth acquisition in Europe after Wallis and CP Pharmaceuticals in Britain and Esparma in Germany.

Goodbody Corporate Finance advised Pinewood, which put the business up for sale last April. Some 30 companies are understood to have expressed interest in Pinewood, with Wockhardt competing against Icelandic operator Activis in the final round of offers some weeks ago.

"Pinewood is a good example of the innovative, high-tech businesses that have been developed in Ireland by entrepreneurs over the last 20 years," said Goodbody director Finbarr Griffin.