Nicholas Piramal India, the country's fourth-largest pharmaceutical company and an emerging global player in the custom manufacturing space, has set its eyes on custom manufacturing companies in Europe.
Chairman Ajay Piramal said: "We are constantly in the look out for suitable companies for acquisitions in the custom manufacturing space globally. However, it is too early to provide specific details as the plans are at a preliminary stage. It is unclear whether the company shall enter into any binding agreement to acquire any such target."
A source close to the development said NPIL was in the race for few leading custom manufacturing companies through competitive bids and also through one to one talks in the important geographies, including France, Germany and the UK.
The NPIL board had last month approved an enabling resolution to raise resources through issue of "appropriate securities" in domestic or international markets, up to $1 billion to fund potential acquisitions.
Apart from this, the company had also sought for increasing its borrowing limit. The requisite approval from shareholders is also being sought through postal ballot.
"The acquisitions planned in Europe will not be big ticket deals. The targets are mostly technology-based companies, which are catering to the contract manufacturing requirement for innovative companies. However, at this stage it is not possible to predict whether it will be successful at all in any of its bid to acquire such targets. The company will make announcements at an appropriate time," Piramal added.
The company had recently announced that its strategy is to grow through acquisitions and these acquisitions may entail entering into exclusivity arrangements with potential sellers.
Meanwhile, the company is also looking at newer contracts to expand the custom manufacturing business, which promises to be one of the most important segments of its future growth.
Currently, the company has three such major contracts in the global custom manufacturing space.
These contracts include the long-term contract manufacturing related R&D services agreements with Pfizer International LLC, AMO and Allergan Inc. NPIL is targeting five-fold growth in its custom manufacturing business to 40 per cent of its revenue by 2009.
The company is also evaluating domestic acquisitions to beef up production capacity for the purpose.