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. Last Updated: 07/27/2016

Germans Buy Drug Firm Makiz

FRANKFURT, Germany -- Stada Arzneimittel has agreed to acquire Russian drug group Makiz for up to 135 million euros ($185 million) to expand in the fast-growing market.

The acquisition, which will cost a minimum 125 million euros less debt, is the second-biggest in the generic drugmaker's 110-year history after its 494 million euro purchase of Hemofarm last year that has boosted earnings and sales.

Stada, which makes copies of Merck's Zocor cholesterol drug and AstraZeneca's Prilosec anti-ulcerant, said it bought Makiz from several private investors.

Makiz, one of the fastest-growing suppliers in the Russian drug market, posted after-tax profit of 7.1 million euros on sales of 52 million euros last year, Stada said. The maximum price is 2.6 times Makiz sales and about 19 times its profit. This compared with the 2.4 times 2005 sales and 18 times profit that Stada paid for Hemofarm.

A Stada spokesman said Makiz would start adding to earnings in the medium term with its more than 50 products using off-patent active ingredients. "That means in two to three years," the spokesman said.

Stada said it had bought Makiz to strengthen its position in Russia, where it made sales of 21.4 million euros in the first quarter.

"At the same time, the Stada group also gains access to further low-cost production units and development centers in this region," Stada said.