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It is also a bold and decisive move by the Litha Group to create competitive differentiation in the fast-growing South African pharmaceutical market which is estimated to be worth around R30 billion. 

In terms of the deal, a number of indivisible agreements have been signed which will result in Paladin becoming Litha's largest shareholder and international strategic partner.  Litha will acquire 100% of Pharmaplan, Paladin's South African based pharmaceutical operations, which will then merge with Litha's Pharma Division.

The group will achieve a key milestone in its pharmaceutical strategy of rapidly growing its Litha Pharma Division through acquisitions and will now be the Litha's second largest division by revenue and largest by earnings.

"With business interests spanning pharmaceuticals, vaccines and medical devices, the enlarged group will now deliver on its stated strategy to acquire pharmaceutical businesses in order to possess enhanced commercial scale and portfolio breadth within its pharmaceutical operations.

"The acquisition will give the Group the appropriate critical mass across all three divisions namely pharmaceuticals, vaccines and medical devices which will enhance Litha's capacity to negotiate with suppliers on a bigger scale as a diversified company.

"The Group will continue to synergise and solidify its business model in South Africa and develop its long term strategy to expand its African footprint in the sub-Saharan African healthcare market," Litha says.

With a proven track record in the specialist prescription medicine market, Pharmaplan has had a 24.7 % Compounded Annual Growth Return over the past four years which is double that of the South African pharmaceutical market (12.9%) for the same period.

"The merging of our Pharma Division with Pharmaplan will not only boost our current product portfolio revenues, but also broaden our access to international R&D pipelines and improve our current platform for expansion into new markets including biogenerics, oncology and aesthetic medicine. Pharmaplan will also benefit from the additional opportunities which the synergies across the group's business operations will provide, which include our relationship with the Department of Health through our Public Private Partnership (PPP) at The Biovac Institute," explains Kahanovitz.

"We are confident that with our skills and expertise, coupled with Pharmaplan's exclusive international supplier agreements, we will bring long-term value to the Group which is not only empowered but has long established relationships with government and a sizable public healthcare marketshare," says Dr. Gert Hoogland, CEO and Founder of Pharmaplan.  

"This strategic partnership with Litha will become a commercial powerhouse to extend our footprint in Sub-Saharan Africa," says Mark Beaudet, Interim President and Chief Executive Officer of Paladin Labs Inc. "Paladin will benefit from Litha's locally empowered business, as well as experience in dealing with the public healthcare sector through its vaccines business, as it seeks opportunities in the rapidly growing African markets of interest to us.  Our combined focus on business development, sales and marketing and our unprecedented customer reach via pharmaceuticals, vaccines and medical devices will make us a formidable competitor for the long run on the African continent," concludes Beaudet.

The deal provides many opportunities for all parties and the merging of the two 'entrepreneurial style' pharmaceutical businesses will ensure a like-minded model for integration and continuation of the business culture.  As a listed company on the Toronto Stock Exchange, Paladin will play an active role in opening up international prospects from a product pipeline and investment perspective, as well as provide their business and industry experience as members of the Litha Board of Directors. 

Dr Hoogland will head up the entire Litha Pharma Division which will include all Litha's pharmaceutical interests within the group. This will ensure the continuation of these businesses with no foreseeable change in leadership or key personnel within Litha Group's operational business model.  Together with Paladin's Interim President and CEO Mark Beaudet and its VP of Business and Corporate Development, Mark Nawacki, Hoogland will join Litha's Board of Directors, effective from the closing date.