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Elder Pharma to buy 20 per cent of UK's NeutraHealth

As a first step toward entering the regulated markets of the EU and the US, India-headquartered, integrated healthcare firm Elder Pharmaceuticals makes its first EU-based acquisition

As a first step toward entering the regulated markets of the EU and the US, India-headquartered, integrated healthcare firm Elder Pharmaceuticals has made its first EU-based acquisition.

Elder has conditionally agreed to acquire a 20 per cent stake in London-based marketing and distribution company NeutraHealth for GBP 5.6m (INR 470m). Elder will not be making an open offer, but instead will be taking warrants and making the investment directly. Payment is subject to clearance which will take approximately 21 days.

NeutraHealth is listed on London's AIM, with a turnover of GBP 23m and a market capitalisation of almost GBP 16.8m. Stock is currently trading at around GBP 0.12.

Alok Saxena, who is Elder's international director, stated that the firm sees the acquisition as an entry point into the regulated market.

Saxena said: "NeutraHealth is one of the largest companies in the UK specialising in nutraceutical products, an area in which Elder is quite strong. We are among the top three companies in India in the market. This will be a very strategic move for both of us because we could backend our products and their products together could be marketed in the Indian market and our products could be marketed by them in the UK market."

Jagdish Saxena, a main board director of Elder, will be appointed as a director of NeutraHealth. This will take effect from, and is conditional on, the existing shareholders of NeutraHealth giving their approval in a general meeting, expected to be held in August 2007.

NeutraHealth intends to use the proceeds of the subscription for shares by Elder to reduce existing debt and develop its business interests in the high growth, niche area of the expanding functional foods sector.

26th July 2007

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