MIRA INFORM REPORT
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Report Date : |
16.12.2011 |
IDENTIFICATION DETAILS
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Name : |
CHEMAGIS LTD. |
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Registered Office : |
P.O. Box 9091, Tel Aviv (61090), P.O. Box 31, Bnei Brak (51110), 31 Lehi Street, Industrial Zone, Bnei Brak 51200 |
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Country : |
Israel |
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Financials (as on) : |
25.06.2011 |
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Date of Incorporation : |
21.08.1986 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Developers, manufacturers, exporters and marketers of Active
Pharmaceutical Ingredient (API), for the generic pharmaceutical industry |
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No. of Employees
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400 persons |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment
Behaviour : |
No Complaints |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30th, 2011
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Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
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Israel |
a2 |
a2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
Company name & address
CHEMAGIS LTD.
Telephone 972 3 577 36 09; 577 38 80; 636 92 22
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 & LEGAL FORMATION
A private limited
company, incorporated as per file No. 51-113965-1 on the 21.08.1986.
SHARE CAPITAL
Authorized share
capital NIS 55,000,000.00, divided into -
55,000,000 ordinary shares of
NIS 1.00 each,
of which
42,961,680 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 company, whose
shares are traded on the NASDAQ Stock Market (PRGO) and the Tel Aviv Stock
Exchange.
DIRECTORS
1. Joseph C. Papa, CEO of PERRIGO CO.,
2. Rafael (Rafi) Label, General Manager of
PERRIGO ISRAEL,
3. Moshe (Mori) Arkin.
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.
Sales are to generic
and branded pharmaceutical companies worldwide, including to affiliate PERRIGO
manufacturers.
Among local
suppliers: LUXEMBOURG INDUSTRIES, MARLOV, TAGAD CHEMICALS, SMADAR TECHNOLOGIES,
YES PHARMA, HOLLAND-MORAN, etc.
Operating from
main offices in 31 Lehi Street, Industrial Zone, Bnei Brak (PERRIGO Group
headquarters is 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 69,700
sq. meters (owned by the Group), in Ramat Hovav Industrial Zone, south of Beer
Sheva.
PERRIGO Group also erects an API facility in India.
Having some 400
employees in subject (in 2008).
Having some 900 employees
serving the PERRIGO ISRAEL Group (had 950 employees in June 2010).
There are some
7,000 employees in the PERRIGO Group worldwide.
MEANS
Subject's stock
was valued at US$
PERRIGO CO.
current market value US$ 8,228 million.
Subject is an
“Approved Enterprise” and as such enjoys tax benefits and State incentives.
In June 1999 the
Israeli Investment Center (IIC) 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, IIC
approved US$ 8 million investment plan for the expansion of subject’s plant.
According to
PERRIGO CO.'s financial statements, total assets of API Division as of
24.09.2011: US$ 269,912,000.
There
Financial data is
included in the consolidated B/S of PERRIGO COMPANY INC. which shows (fiscal
year ends June 30th):
US$
(thousands)
25.06.2011 26.06.2010
ASSETS
Current assets
Cash
& cash equivalents 310,104 109,765
Restricted
cash & others - 400,559
Accounts
receivable 477,851 359,809
Inventories 505,576 452,980
Other
current assets 83,762 79,588
1,377,293 1,402,701
Property & equipment (net) 507,308 448,583
Goodwill 644,902 618,042
Other intangible assets 567,573 587,000
Other non-current assets 92,145 52,677
3,189,221 3,109,003
======== ========
LIABILITIES
Current liabilities 606,035 922,509
Non-current liabilities 1,052,199 1,092,554
Equity 1,530,987 1,093,940
3,189,221 3,109,003
======== ========
SALES
Sales by PERRIGO’s
API segment (which comprises mainly of subject’s activities) for the fiscal
year ending:
· June 2008 - US$ 149,553,000, making an operating profit of US$ 20,475,000.
· June 2009 - US$ 136,002,000, making an operating profit of US$ 4,039,000.
· June 2010 - US$ 139,287,000, making an operating profit of US$ 15,312,000.
· June 2011 - US$ 155,717,000, making an operating profit of US$ 37,819,000.
API segment sales
for the first fiscal quarter of 2012 (ended 24.09.2011) were US$ 47,644,000
(27.5% increase from parallel period in 2011), making an operating profit of
US$ 14,578,000.
PERRIGO
COMPANY INC.
Consolidated
Statement of Income
US$
(thousands)
Fiscal
Year ended 30th June
2009 2010 2011
Sales 2,006,862 2,268,870 2,755,029
Gross profit 595,997 746,016 944,870
Operating income 247,307 335,895 490,205
Income before income
taxes 203,780 308,186 450,554
Net income 144,049 222,546 339,197
======== ======== ========
PERRIGO COMPANY INC. consolidated first quarter
of 2012 sales were US$ 725,295,000 (13% increase compared to the parallel period
in 2011), making a gross profit of US$ 227,579,000, an operating income of US$ 101,552,000 and a net income of US$ 70,458,000.
OTHER COMPANIES
· CHEMAGIS INC.,
· CHEMAGIS GERMANY GmbH,
· CHEMAGIS B.V., Netherlands.
PERRIGO ISRAEL
PHARMACEUTICALS LTD., developers, manufacturers, importers, marketers and
exporters of pharmaceuticals: (Rx) drugs (Innovation & Generics), OTC
prescription drugs, API (via subject), 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):
PERRIGO ISRAEL
AGENCIES LTD. (formerly AGIS COMMERCIAL AGENCIES (1989) LTD.), importers,
agents, wholesalers and marketers of pharmaceuticals (branded prescription
drugs under licenses) and cosmetics.
AGIS INVESTMENTS
(2000) LTD.,
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.
VESTECK LTD.,
DOVECHEM LTD.,
ARGINET
INVESTMENTS AND PROPERTY (2003) LTD.
PERRIGO ISRAEL
ENTERPRISES & INVESTNETS LTD. (formerly NECA CHEMICALS 1952 LTD.)
PHARMA CLAL (1983)
LTD.,
And many other foreign
subsidiaries in the PERRIGO CO. Group, which includes, among others:
· L. PERRIGO COMPANY, PERRIGO COMPANY SOUTH CAROLINA,
·
PERRIGO NEW YORY INC., latter 3 of the USA, handling the group's prime
activities,
· QUIMICA Y FARMACIA S.A. DE C.V.,
· LABORATORIOS DIBA, S.A.,
· WRAFTON LABORATORIES LIMITED,
· BRUNEL PHARMA LIMITED (formerly BRUNEL HEALTHCARE LTD.),
· GALPHARM HEALTHCARE LTD.
·
ORION LABORATORIES PTY LTD.
· PERRIGO INTERNATIONAL INC, which controlls:
· PERRIGO ISRAEL LIMITED PARTNERSHIP,
·
PERRIGO
ISRAEL HOLDINGS LTD., which controlls:
·
PERRIGO
ISRAEL OPPORTUNITIES II LTD.
BANKERS
· Bank Leumi Le’Israel Ltd., Tel Aviv 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 are common in the branch) and alleged environment
violations in Ramat Hovav plant (relatively insignificant).
So far we were
unable to speak with subject’s officials. We left a message and sent a fax, but
received no reply as of yet.
Subject is veteran
and well-known in its field. Its products comply with the requirements and
standards of leading health authorities including the FDA.
PERRIGO ISRAEL is
the second largest supplier of pharmaceuticals to the local market (after TEVA
PHARMACEUTICALS), with s 14% market share. It is the second largest
manufacturer of generic raw materials for the international pharmaceutical
market (also after TEVA).
PERRIGO CO., founded 1887, based
in Michigan, is the largest OTC and food supplement manufacturer for the store
brand market, one of the 3 leading companies in USA in the RX generic
dermatology field and one of the 10 leading companies worldwide in the API
field.
In March 2005,
PERRIGO CO. of the USA completed the acquisition of local AGIS INDUSTRIES
(1983) LTD., in return of US$ 450 million in cash and 23% of PERRIGO shares
(the deal reflecting a US$818 million company value to AGIS).
Consequently, AGIS changed its name to PERRIGO ISRAEL PHARMACEUTICALS
LTD., was de-listed from trade and PERRIGO’s (parent) shares began trading on
the Tel Aviv Stock Exchange in March 2005.
In March 2007
PERRIGO CO. acquired certain generic prescription dermatological products from
GLADES PHARMACEUTICALS INC. for US$ 57 million.
In May 2008 the Labor
Union declared a workers’ dispute in subject’s plant, after the Union demands
for better employment terms were not met. In November 2008 the sides reached
compromises, including a 7% raise in workers’ salaries.
As part of PERRIGO
re-organization in the Group’s activities in Israel, in February 2010 PERRIGO
completed the transaction of selling its Israel Consumer Products business,
i.e. manufacturing, marketing and distribution of consumer products: cosmetics,
toiletries, detergents (CARELINE, NECA, and DAN-AGIS and AGIS DISTRIBUTION)
along with the related production assets in Israel to EMILIA DEVELOPMENT
(O.F.G) LTD. of the Emilia Group, for total sum of NIS 205 million.
In the fourth
quarter of fiscal 2009, PERRIGO decided to close its German API facility
(acquired in 2002 for of €2.9 million), though eventually sold these operations
to a 3rd party.
To further enhance
its API business, in August 2009 PERRIGO acquired 85% in VEDANTS DRUG &
FINE CHEMICALS LTD., an API manufacturing facility in India, for US$12 million.
The facility, located near Mumbai, is currently under construction and will
manufacture PERRIGO’s current and future high-volume API products, as well as
expand the Company’s vertical integration of Rx and future candidate Rx-to-OTC switch
products. Manufacturing of API at this facility is expected to begin during the
2nd half of fiscal 2012 year and will include certain API products
currently manufactured in Germany and Israel (PERRIGO ISRAEL General Manager
said no dismissals in subject’s Ramat Hovav Plant forecasted).
Following
conflicts with the Ministry of Environment regarding sewage dumping into
collective pools in Ramat Hovav, in January 2011 it was agreed that subject
(together with another 4 companies) will construct separate sewage pools with a
total investment of NIS 400 million.
Annual sales
volume in the local pharmaceuticals market is estimated at NIS 4 billion,
divided into NIS 1.8 billion to the institutional sector (HMO's, hospitals,
etc.) and NIS 1.2 billion to the private sector (including pharma retail
chains).
In 2009 sales of
drugs for human consumption (including from import) reached US$ 1,409 million
(US$ 1,416 million in 2008), of which estimated over US$ 1,100 million were
from import.
The
non-prescription drugs market in Israel is valued at some 15% of the local
whole drugs market, with annual growth rate of circa 15%.
Exports of
pharmaceuticals in 2010 rose by 41.5% from 2009, reaching US$ 6,614 million.
This comes after in 2009 exports fell by 6.7% from 2008, due to the global
economic crisis.
Sales for export
are to over 120 countries. Products included drugs, raw materials for medicine
production, veterinary medication.
There are some 13 generic
pharmaceutics production companies in Israel and the industry employs 9,000
employees.
According to Central Bureau of Statistics data, investments
in imported machinery and equipment from for the Chemical Industries (incl.
Pharmaceuticals) in 2010 summed up to NIS 1,045 million, representing a 24.4%
decrease in real terms from 2009 (after 0.5% decrease in 2009 from 2008 and
18.7% increase in 2008 from 2007).
SUMMARY
Good for trade engagements.
Maximum unsecured
credit recommended several US$ million.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.54.24 |
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UK Pound |
1 |
Rs.83.77 |
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Euro |
1 |
Rs.70.46 |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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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 |
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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 |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
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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 |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NB |
New Business |
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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%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.