South African pharma company Aspen Pharmacare Holdings is attracting attention as a potential takeover candidate, according to three sources familiar with the situation.

The Johannesburg Stock Exchange (JSE) listed company has received interest from an undisclosed Indian generic pharma company and is holding bilateral talks, one of the sources said.

South Africa is a huge market for generics and an ideal location from which to enter Latin American markets, said the source.

Indian pharma players are trading at higher multiples than their South African counterparts, thus making such deals more viable for them, said a South Africa-based sector banker.

Indian pharmaceutical companies with global footprints and strong supply chains trade at EBITDA multiples of 10x to 59x, according to a market analysis, while Aspen’s latest 12-month EV/EBITDA ratio stands at 8.4x approximately.

The company registered revenue of ZAR 43.4bn (USD 2.5bn) for FY25 ended June 2025 with USD 561m in EBITDA, as per its website. Currently, institutions own 74.9% stake, while individual insiders and general public own 17.5% and 7.54% stake respectively.

In case a deal is struck, the structure could be similar to Indian pharma company NATCO Pharma’s acquisition of South African Adcock Ingram, said the first source.

NATCO Pharma acquired 35.75% of Adcock Ingram Holdings for ZAR 3.87bn (USD 221m) via a scheme of arrangement this year. The transaction was completed on 12 November following shareholder and regulatory approvals, after which Adcock Ingram was delisted, as announced. The deal valued Adcock at an EV/EBITDA multiple of 9.34x, according to Mergermarket data.

Shares down

Explaining the possibility of a take-private offer and events potentially leading up to it, a second South African sector banker mentioned that the company’s earnings have seen negative impact in FY25 with share price drops due to large impairments, indicating ongoing challenges and strategic adjustments.

The company also disclosed the mRNA contract dispute in April, which hit both earnings and the share price. A EUR 25m settlement was announced in October and set to be paid before 1 December 2025.

Aspen has lost about 44% year to date, shrinking its market value to around ZAR 42bn (USD 2.5bn), versus a 35.6% gain for JSE All‑Share.

According to the group financial results for the year ended 30 June 2025, the group has had a challenging financial year, turning to a net loss of ZAR 1bn. For FY26, the commercial pharmaceuticals division is expected to record mid-single digit organic revenue and stronger EBITDA growth in CER (constant exchange rate), it said.

The second banker also highlighted that in 2022, the company halted production of its branded COVID-19 vaccine, Aspenovax, in South Africa due to a lack of orders and global oversupply of vaccines at the time.

Founded in 1997, Durban-headquartered Aspen manufactures and markets branded and generic medicines for hospital and consumer markets globally. It operates through manufacturing and commercial segments, producing injectables, prescription, and OTC products including steriles, oral solids, liquids, semi-solids, biologicals, and active pharmaceutical ingredients Its portfolio includes specialty and post-patent medicines distributed in over 115 countries.

Aspen Pharmacare declined to comment.