Jubilant Organosys Acquires Clinical Research Organization (CRO) in USA

Jubilant Organosys Ltd. (Jubilant),an integrated pharmaceuticals company, has acquired Target ResearchAssociates, Inc. (Target), a US-based, full service Clinical ResearchOrganization (CRO). This is the first ever acquisition of a U.S. CRO by anIndian company, and it represents a major initiative supporting Jubilant'splan to expand its CRO services globally. This acquisition makes Jubilant thelargest Indian CRO having operations in India and USA. Jubilant providesproducts and services to the global life sciences industry and has reportedrevenues of US$ 270 million in its fiscal year ended 31st March 2005. Jubilant has acquired a 100% equity stake in Target for a payment of US$33.5 million in cash. The purchase price assumes zero closing working capitalon the date of acquisition and is subject to adjustment in case of any changein working capital. Target is a debt free company with a healthy EBITDAmargin, and it has been consistently profitable with a solid operating base inthe CRO industry. The acquisition is earnings accretive to Jubilant. Itprovides an established and robust business platform for the rapid growth anddevelopment of Jubilant's clinical research business. Jubilant has an Indian subsidiary, Jubilant Clinsys Ltd., which conductsbioavailability studies through its world-class, 54-bed facility andbioanalytical laboratory. The company also has the skills to provide clinicalPhase I-IV services. Target is now able to offer its U.S. based clients all of the benefits ofproviding clinical research services out of India, including high quality,cost competitive data management services and access to a large patientpopulation of diversified ethnicity. This will enable faster patientenrollment, thus reducing the time taken to complete clinical studies. Thiswill also allow clients to accelerate the process of obtaining marketingauthorization for their new drugs, resulting in faster realization of revenuesfrom their investments. Target, founded in 1992 and headquartered in Berkeley Heights, New Jersey,conducts clinical trials in Phases I to IV. Target is the preferred servicesprovider for clinical research for some of the leading global pharmaceuticalplayers. It offers services in study protocol development, investigatorrecruitment, project management, monitoring, data management, biostatisticalanalyses, medical writing, regulatory affairs, quality assurance, and drugsafety for the pharmaceutical and biotech industry. Target has particularlystrong experience in the oncology, pulmonary, allergy, dermatology,cardiovascular, gastrointestinal, transplant, and anti-infective therapeuticareas. Commenting on the proposed acquisition, Shyam S Bhartia, Chairman &Managing Director and Hari S Bhartia, Co-Chairman & Managing Director ofJubilant said: "Target fits very well with Jubilant's strategy to expand its strongrelationships with many of the leading pharmaceutical companies in the world.We are one of the largest players in India providing discovery services topharmaceutical companies in their drug development efforts. Clinical researchis an important part of drug development, and it is natural for us to have asignificant presence in this segment as well. The acquisition of Targetfurther enables Jubilant to increase its presence in the U.S. market, whichhas the highest concentration of pharmaceutical and biotech companies. This acquisition offers a great opportunity to Jubilant to strengthen itsposition as a preferred outsourcing partner to pharma companies to reducetheir drug development costs and time to market. Further, integration ofJubilant Clinsys, our Indian CRO, with Target will enhance business potentialin the area of data management and clinical research services." According to Lloyd Baroody, Chief Executive Officer and Co-Founder ofTarget: "India, with its large cadre of highly educated professionals in thehealthcare and medical fields and competitive cost environment, has become avery attractive country for conducting clinical research. Its large, untappedpatient population will allow us to accelerate our clients' clinical studiesand deliver quality and cost-effective services to our clients at a time whenthey are seeking much greater value from their service providers. We are very excited about our future prospects with Jubilant as our parentcompany. They have a world-class management team, and their goals ofcontinuously strengthening their operations as a global CRO are in perfectalignment with those of Target. Jubilant's large local presence in India willgive us a definite competitive edge. Target will maintain its global face inthe U.S. while operating as part of a strong integrated pharmaceuticalindustry player out of India. I believe that this acquisition of a U.S. CROby an Indian company is a milestone event in the CRO industry." About Jubilant Organosys Ltd. Jubilant Organosys Limited is an integrated pharmaceutical companyproviding products and services to the global life sciences industry.Jubilant has a presence across the value chain from drug discovery services tofinished dosage forms and including Custom Research and Manufacturing Services(CRAMS), Active Pharmaceutical Ingredients (APIs), and Contract ResearchServices.