A businessman who set up a drug company in Co Tipperary 30 years ago is poised to sell the business to an Indian pharmaceutical group for more than €100 million.
Michael Costello established Pinewood Laboratories in Ballymacarbry, near Clonmel in Co Tipperary, in 1976. The company remains there to this day, making generic drugs, creams and ointments for sale into more than 30 international markets.
Mr Costello (65) entered talks last week to sell Pinewood to a group called Wockhardt Ltd, which is based in Mumbai. A deal is expected within a fortnight.
As managing director of the business and its controlling shareholder, Mr Costello will be the main beneficiary of a sale. Members of his company's board and its management team will benefit to a smaller extent.
Enterprise Ireland, the State body that promotes indigenous industry, will also benefit, thanks to its minority stake in Pinewood.
The company has been on the market for several months and it is said to have attracted considerable interest from international drug companies.
While Wockhardt was not mentioned among the original suitors, its offer for Pinewood surpassed all others in a final round of bids last week.
Pinewood is the leading generic drug company in the Irish market. The company employs 350-400 people at its manufacturing plant in Ballymacarbry and at its warehouse in Ballymount, Dublin.
Generic pharmaceutical products can be made and sold by any drug group because the patent on the product has expired. Unlike drugs that are still under patent, they are typically sold without a brand name.
Pinewood is known to make liquids, creams, ointments and powders under its own licences in Ireland. It also holds international licences on more than 200 prescription and other products.
In the year to June 2005, the company made pretax profits of €5.56 million on sales of €46.19 million. The profits accumulated by the business stood at more than €21 million last year.
Mr Costello did not return calls yesterday and the spokesmen for Wockhardt and Enterprise Ireland declined to comment. However, industry sources said a transaction was imminent. Goodbody Corporate Finance advised Pinewood.
