Motilal Oswal: Aurobindo Pharma’s Natrol Divestment - Review
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Motilal Oswal Report
Aurobindo Pharma Ltd. has announced the divestment of Natrol, a wholly owned unit of its U.S.-based subsidiary, for 550 million U.S. dollar (approximately Rs 40 billion) as an all-cash deal.
Considering Natrol’s FY20 sales/profit after tax at 157 million U.S. dollar /27 million U.S. dollar, the deal is attractive at valuation of 3.5 times enterprise value/sales and 20 times price/earning on FY20 basis.
The company is expected to use the funds to further reduce its debt and strengthen future product pipeline.
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