Hyderabad-based genomic research outsourcing company Ocimum Biosolutions has acquired Washington-based Gene Logic’s genomics division for $10 million. Ocimum has paid $7 million upfront to the Nasdaq-listed company and the remaining will be paid after 18 months.

AIMING HIGH: Through the new acquisition, Ocimum aspires to be the world’s number one

The acquisition has been partly funded by investment from Kubera Partners, which pumped in $17 million to acquire a minority stake in Ocimum. “Gene Logic has products such as genomics database, which can be leveraged in an offshore services model,” says Ocimum’s CEO and Founder Anu Acharya. At the height of genomics hype, Gene Logic had commanded a valuation of $2 billion. “We are aiming to be the No. 1 genomics outsourcing company in the world,” says Acharya. “In the current fiscal we are targeting revenues of $14 million and we’ll cross $35 million next year, as the full year revenue of the acquisition will also get consolidated.”

Ocimum’s latest acquisition will bring in revenues worth $20 million, but the business is loss making. “The overheads of the business are high as it is a listed company,” says Acharya. “This can be cut. We are looking at a services business model here, so we can turn around the growth and profitability much quicker.”

This is not the first acquisition for Ocimum. The company has successfully integrated the acquisition of German company MWG Biotech’s micro array business and Dutch company Isogen’s oligonucleotide business. This time the size, scale and expectation is much bigger.

The mad rush of foreign investors picking up stakes in the Indian securities brokerage firms continues. On 24 December 2007, India Infoline, which has a market capitalisation of Rs 8,000 crore, announced a preferential issue of 3.7 million shares to Singapore-based private investment firm, Orient Global, at Rs 1,500 per share. This amounts to a 6.48 per cent stake post-preferential issue.

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The stake is not high considering that as on 30 September 2007, non-promoter institutional shareholders that collectively held 35.33 per cent included large foreign institutional investor and FII sub-account-shareholders such as Citigroup Global Market Mauritius (5 per cent), T. Rowe Price International (4.48 per cent) and Monsoon India Inflection Fund (2.18 per cent). It even had large non-promoter non-mutual fund domestic shareholders such as Khattar Holdings (3.92 per cent) and Bennet Coleman & Co. (2.20 per cent).

But the valuation of Rs 1,500 per share was definitely very high for Orient Global to get its feet in. As recently as four months ago, India Infoline stock was trading at Rs 600-700 levels. Orient Global is also going to pump in Rs 197 crore for a 10 per cent stake in India Infoline’s 100 per cent subsidiary, India Infoline Marketing Services (IIMS), which in turn is a 100 per cent investor each in India Infoline Insurance Services and India Infoline Insurance Brokers.

The price has not been disclosed by India Infoline. However, BW has learnt that IIMS was incorporated in September 2007 with an authorised capital of Rs 10 crore. A 10 per cent stake of face value Rs 1 crore to be sold at Rs 197 crore would mean a price per share of Rs 197.

In early 2007, Citigroup Venture Capital picked up a 75 per cent stake in Sharekhan, a brokerage firm of Shripal Morakhia’s SSKI group. Geojit Financial, a large retail brokerage firm, saw 26 per cent stake being acquired by BNP Paribas. Stanchart took a 49 per cent stake in UTI Securities.