MIRA
INFORM REPORT
|
Report Date : |
28.03.2008 |
IDENTIFICATION
DETAILS
|
Name : |
CHEMAGIS LTD |
|
|
|
|
Registered Office : |
P.O. Box 9091,
Tel Aviv (61090) , P.O. Box 31, Bnei Brak (51110) 31 Lehi Street, Industrial Zone, BNEI BRAK 51200 |
|
|
|
|
Country : |
Israel |
|
|
|
|
Financials (as on) : |
29.12.2007 |
|
|
|
|
Date of Incorporation : |
21.08.1986. |
|
|
|
|
Legal Form : |
Private Limited Company |
|
|
|
|
Line of Business : |
Developers, manufacturers,
exporters and marketers of Active Pharmaceutical Ingredient (API), for the
generic pharmaceutical industry. |
RATING &
COMMENTS
|
MIRA’s Rating : |
A |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
No Complaints |
|
|
|
|
Litigation : |
Clear |
Name & address
CHEMAGIS LTD.
Telephone 972 3 577 36 09; 577 38
80
Fax 972 3 577 38 23
P.O. Box 9091, Tel
Aviv (61090)
P.O. Box 31, Bnei
Brak (51110)
31 Lehi Street
Industrial Zone
BNEI BRAK 51200
ISRAEL
HISTORY
A private limited
company, incorporated as per file No. 51-113965-1 on the 21.8.1986.
SHARE CAPITAL
Authorized share
capital NIS 55,000,000.00, divided into -
55,000,000 ordinary shares
of NIS 1.00 each,
of which shares
amounting to NIS 42,961,680.00 were issued.
SHAREHOLDERS
Subject
is fully owned by PERRIGO ISRAEL PHARMACEUTICALS LTD., a wholly-owned
subsidiary of PERRIGO COMPANY INC. of the USA, a public limited liability
company, whose shares are traded on the Nasdaq Stock Exchange (PRGO) and the
Tel Aviv Stock Exchange.
DIRECTORS
1. Moshe (Mori) Arkin, Vice Chairman of PERRIGO CO.
2. Rafael (Rafi) Label, General Manager of PERRIGO ISRAEL,
3. Joseph C. Papa, CEO of PERRIGO CO.
GENERAL MANAGER
Boaz Laor.
BUSINESS
Developers,
manufacturers, exporters and marketers of Active Pharmaceutical Ingredient
(API), for the generic pharmaceutical industry.
Over 90% of sales
are for export.
Among local
suppliers: MARLOV, Y. SMADAR ENGINEERING, YES PHARMA.
Operating from PERRIGO
Group headquarters in 31 Lehi Street, Industrial Zone, Bnei Brak (headquarters
also located in 29 Lehi Street) and from:
1. Offices and laboratories
(rented), on an area of 700 sq. meters in 3 Hashlosha Street, Tel Aviv,
2. A plant, on an area of 60,000
sq. meters (owned by the Group) in Ramat Hovav Industrial Zone, south of Beer
Sheva.
3. A plant, on an area of 10,500
sq. meters in Wiesbaden, Germany.
Having 400
employees in subject.
There are 1,700
employees serving the AGIS Group in Israel, and 6,200 employees in the PERRIGO
Group worldwide.
MEANS
Subject's current stock is valued at US$
40,000,000.
PERRIGO CO. current market value US$ 3.52
billion.
Subject is an
“Approved Enterprise” and as such enjoys tax benefits and State incentives.
In June 1999 the
Investment Centre Administration approved subject’s investment plan of US$ 6.87
million for the expansion of the plant in Ramat Hovav, and a further US$ 8
million investment plant was approved in April 2001.
In July 2003, the
Investment Center Administration approved US$ 8 million investment plan for the
expansion of subject’s plant.
There is 1 charge
for an unlimited amount registered on the company's assets, in favor of the
State of Israel.
Financial
data is included in the consolidated B/S of PERRIGO COMPANY INC. which shows:
US$
(thousands)
29.12.2007 30.06.2007
ASSETS
Current Assets
Cash and cash equivalents 72,163 30,305
Investment securities 29,642 49,110
Accounts receivable 311,013 282,045
Inventories 326,002 295,114
Current deferred income taxes 38,683 41,400
Income taxes refundable 4,568 -
Assets held for sale 2,746 2,746
Prepaid expenses and
Other current assets _18,669 _18,340
803,486 719,060
Fixed assets (net) 329,000 331,072
Restricted cash 400,000 422,000
Goodwill 212,934 196,218
Other intangible
assets 191,430 159,977
Non-current
deferred expenses 59,925 54,908
Other non-current
assets __42,535 __41,919
2,039,310 1,925,154
======== ========
LIABILITIES
Current liabilities 368,702 379,837
Non-current liabilities 854,212 790,848
Equity _816,396 _754,469
2,039,310 1,925,154
======== ========
ANNUAL SALES
Subject’s 2006
sales were US$ 125,000,000.
Subject’s 2007
sales were US$ 140,000,000.
Operating profit
is around 21% of turnover.
PERRIGO
COMPANY INC.
Consolidated
Statement of Income
US$
(thousands)
Fiscal
Year ended 30th June
2005 2006 2007
Sales 1,024,098 1,366,821 1,447,428
Gross profit 260,389 397,741 401,625
Operating income (loss) (330,473) 111,332 98,551
Income (loss) before income taxes (330,693) 105,935 89,054
Net income (loss) (352,983) 71,400 73,797
======== ======== =======
PERRIGO CO. consolidated sales for the first
2 quarters (six months ending 29.12.2007) of the fiscal year ending June 2008
were US$ 818,223,000 (15% increase comparing to the parallel period the
previous year), making a gross profit of US$ 247,130,000, an operating income
of US$ 94,889,000, and a net profit of US$ 68,308,000.
OTHER COMPANIES
CHEMAGIS INC.,
CHEMAGIS GERMANY GmbH,
CHEMAGIS B.V., Netherlands.
PERRIGO ISRAEL PHARMACEUTICALS LTD.,
developers in manufacturers, importers, marketers and exporters of
pharmaceuticals (also generic), cosmetics, toiletries, detergents and cleaning
products, raw materials to the pharmaceutical industry, etc. Also Operates as
manufacturers of pharmaceuticals as sub-contractors for other companies and as
importers and marketers of medical equipment.
PERRIGO ISRAEL also controls (all fully
owned subsidiaries, unless otherwise mentioned):
CARELINE
(PHARMAGIS) LTD., developers, manufacturers, exporters and marketers of
cosmetics, perfumes and toiletries.
NECA CHEMICALS (1952) LTD., manufacturers of
chemicals, detergents and toiletries.
DAN – AGIS LTD., 50%, distributors of the
CARELINE-NECA Group products and other products.
AGIS DISTRIBUTION AND MARKETING (1989) LTD.
AGIS INVESTMENTS (2000) LTD.
VESTECK LTD.
AGIS COMMERCIAL AGENCIES (1989) LTD.,
importers, agents, wholesalers and marketers of pharmaceuticals (branded
prescription drugs under licenses) and medical diagnostics equipment.
CLAY PARK LABS INC. (known as CP), New York,
manufactures and markets generic topical drugs prescription (Rx), and store
branded over-the-counter (OTC) products.
ELITE SOAP MANUFACTURERS (1986) LTD.
ARGINET INVESTMENTS AND PROPERTY (2003) LTD.
DOVECHEM LTD.
PHARMA CLAL LTD.
And many other foreign subsidiaries in the
PERRIGO Group.
BANKERS
Bank Leumi
LeIsrael Ltd., Central Branch (No. 800), Tel Aviv.
Mizrahi Tefahot Bank Ltd., Tel Aviv Main Business Center Branch (No.
461), Tel Aviv.
CHARACTER AND REPUTATION
Nothing unfavorable learned, besides several
pending cases handled in courts regarding drugs patent related issues (which is
common in the branch).
PERRIGO ISRAEL is the largest local cosmetic
manufacturer and second largest supplier of pharmaceuticals to the local market
(after TEVA PHARMACEUTICALS), also second largest manufacturer of generic raw
materials for the international pharmaceutical market (also after TEVA).
PERRIGO CO., founded 1887, based in Michigan, is a leading
manufacturer of consumer healthcare products and is the world’s largest
manufacturer of OTC and prescription pharmaceuticals, as well as nutritional
products, active pharmaceutical ingredients (API) and consumer products sold to
food, drug and mass merchandise chains under their own labels.
In October 2002,
subject acquired from AVENTIS, an API plant in Germany, for a sum of €5
million. AVENTIS was committed to purchase products from the plant for a sum of
€15 million per year. Subject also acquired 7% of the plant’s assets, for a sum
of €2.9 million.
In November 2004, AGIS INDUSTRIES (1983)
LTD. signed a merger agreement with PERRIGO CO., a foreign private issuer as
defined by U.S. Securities Laws, according to which PERRIGO will acquire all of
AGIS's shares, in return of US$ 450
million in cash and 23% of PERRIGO shares (the deal reflecting a US$818 million
company value to AGIS). The deal was finalized on 17.3.2005.
Consequently, on
26.7.2005 AGIS changed its name to PERRIGO ISRAEL PHARMACEUTICALS LTD., was
de-listed from trade and in parallel PERRIGO’s (parent) shares began trading on
the Tel Aviv Stock Exchange on 16 March, 2005.
In March 2007
PERRIGO CO. acquired certain generic prescription dermatological products from
GLADES PHARMACEUTICALS INC. for US$ 57 million.
In July 2007
parent company PERRIGO INC. completed the acquisition of QUALUS INC. of the
USA, manufacturers of store brand pediculicide products, for US$ 12 million.
Subject cooperates
with BARR in the development of a generic version to the "Temodar"
drug for chemotherapy treatment, originally developed by SCHERING PLOUGH, whose
sales in the USA were US$ 306 million for the last year. Subject and BARR attacked
the due patent and in July 2007 were sued by SCHERING. By 2010 it will become
clear if they would be able to market the drug, in case they win the case.
According to the
Chairman of the Chemical, Pharmaceutical and Environment Division at the Industrialists
Association, total sales of the branches in 2006 witnessed a remarkable 12.6%
growth to US$ 17.4 billon, after in 2005 sales increased by 10% from 2004.
Sales of
pharmaceuticals to the local market in 2006 were estimated at US$ 800 million.
2006 exports of
the branches were US$ 8.8 billion (over 35% of which for pharmaceuticals and
drugs and some one third attributed to the chemical industry), a 15.7% increase
from 2005, and sales to the local market reached US$ 8.6 billion, a 10%
increase from 2005.
The chemical and
pharmaceutical industries are the 2nd largest export branch (after
the hi-tech) and comprise 30% of Israel’s industrial exports. The industry
employs 28,700 employees.
Purchasing abroad
amounted to US$ 1.5 billion in 2006 (around US$ 350 million of which were
pharmaceuticals, 13% increase from 2005).
The branch
projected sales in 2007 include a 15% rise in sales for export (to US$ 10
billion) and 12% rise in total sales (to US$ 19.5 billion).
SUMMARY
Good for trade engagements.
Maximum unsecured credit recommended of up to several US$ millions.
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)