Cipla to acquire 21.85 per cent stake in GoApptiv Private Limited

On June 09, 2020, Cipla Limited signed agreements to acquire shares signifying a stake of 21.85 per cent in GoApptiv Private Limited on a fully diluted basis.

GoApptiv offers digital solutions to pharma companies for integrated brand sales management, digital marketing and channel engagement, and also for customer relationship management, patient support and healthcare data analytics. It has three business segments:

1. ChannelPaisa – Assists pharmaceutical companies in engaging with channel partners and improving the reach of their brands to Tier 2-6 and rural markets

2. MyDocData - Aids organizations in leveraging the advantage of data analytics and improving the success of new products

3. Connect On Demand – Functions as a platform connecting multiple stakeholders (physicians, pharma companies & channel partners) digitally with patients for better treatment outcomes.

With this new development, GoApptiv will help Cipla in broadening the reach of its main brands in the Tier 3+ towns via usage of GoApptiv's solutions for end-to-end brand marketing and channel engagement. Considering the competition in the pharma industry, especially in a highly fragmented market such as India with branded generics and the success rate of a new product being estimated at less than 5 per cent, such an equity investment and strategy is bound to benefit Cipla.

The complete process of acquisition will be competed in two stages. In the first stage, Cipla will subscribe to 15,392 compulsorily convertible preference shares and purchase 6,927 equity shares, leading to a cost of acquisition of about Rs 5.8 crore and taking Cipla's ownership to about 15.26 per cent on a diluted basis.

In the second stage, Cipla will subscribe to additional 12,314 compulsorily convertible preference shares, having a cost of acquisition of about Rs 3.2 crore and taking Cipla's ownership to about 21.85 per cent on a diluted basis. Both stages are subject to specified conditions. 

Cipla's stock opened at Rs 646.6, 1.04 per cent up from its previous close of Rs 639.9.