Swedish drug developer and toll manufacturer Recipharm plans to acquire a majority stake in Nitin Lifesciences, an Indian sterile injectables toll manufacturer founded and currently owned by the Sobti family.

The transaction is expected to close in Q1 2016, following approval from the Indian Foreign Investment Promotion Board (FIPB).

Recipharm, which will acquire 74% of the shares for an estimated consideration of 872 million Swedish crowns on a cash and debt-free basis, said it will cooperate with the Sobti family to “further the current business into a leading position” in the Indian market for sterile injectables including lyophilization, thereby strengthening its own position.

The Indian company will continue to trade under the name Nitin Lifesciences, with Chetan Sobti remaining as CEO. Nitin Sobti will continue as COO. Pro-forma revenue will total 3.5 billion Swedish crowns and EBITDA 607 million Swedish crowns.

The asset merger is expected to boost Recipharm’s presence in high-growth developing territories and “firmly establish” its emerging market strategy. The company said the deal “provides excellent exposure and direct entry into the rapidly expanding Indian market.”

Thomas Eldered, CEO of Recipharm, said his company can also use Nitin as a platform for entry into other regions, while Sobti said the support and network of Recipharm will help his firm to further expand both domestically and internationally.

Headquartered at Karnal in Northern India, Nitin has three state-of-the-art production facilities for small-volume parenterals at Karnal (Haryana state) and at Paonta Sahib (Himachal Pradesh). The newest facility in Paonta Sahib started production in 2014; the business provides high technology pharmaceutical manufacturing solutions.

Recipharm said Nitin brings with it “a high quality customer base that includes a growing number of multinational ‘Big Pharma’ customers supplying the Indian domestic market.”

Within a not further specified time frame, the new Swedish majority owner will have an option to acquire the remaining shares in Nitin. The valuation of the remaining shares will be based on the Indian company’s EBITDA performance until the options are exercised.

Recipharm will finance the transaction through its existing credit facilities. To maintain a long-term financial capacity for further acquisitions, it said it will evaluate financing alternatives that may involve the issuance of shares or other financial instruments in order to increase financial flexibility going forward.