Case Study: ORS L – J&J to acquire?

The world’s sixth largest consumer health and pharma giant Johnson & Johnson (J&J) has emerged as a front-runner to acquire electrolyte energy drink business of Jagdale Healthcare in a deal estimated at Rs 700 crore.

ORSL Health Drink – 100 Crores brand in India

Packing: ORSL 200 ml Tetra pak Aseptic pack
Brand Punchline: Smile for life
Accolades: The No.1 Family refresher electrolyte energy drink
USPs: Excellent taste, Ready to drink – Tasty and refreshing blend of ELECROLYTES, ENERGY FACTORS, VIT. C (100 mg/ 200 ml), and purified water in natural fruit juice base.

PERFECT CHOICE IN MANAGEMENT OF DEBILITY due to heat stress, fevers, exertion,sweating dehydration, drugs like NSAIDS (that cause sweating and loss of electrolytes) and sports.

REDUCES IV THERAPY, dry mouth and PDPH (post dural puncture headache ) due to spinal anesthesia.

IDEAL REJUVENATOR during pregnancy, lactation, delivery, labour, menopause, hypotension and morning sickness; also used for dental patients, ORS-L can be consumed without disturbing clot organization.

About the deal – 

Bangalore-based Jagdale has renewed a sale process to sell the business under the brand ORS-L with an estimated sales of Rs 100 crore annually. French giant Danone and Abbott Laboratories are among the other bidders who are participating in the process.

The discussions with J&J were more advanced but deal-making was not definitive yet, the sources cited earlier added. Jagdale has sought nearly eight times valuation on annual sales, but J&J was unlikely to offer beyond seven times. ORS-L, a patented fruit-based electrolyte drink, competes in the broader energy drinks segment that includes players like Gatorade from PepsiCo.

ORS – Electrolyte belongs to the class of Rehydration Drinks.

Diarrhea and vomiting can cause your body to lose large amounts of water, nutrients, and essential minerals called electrolytes. This happens faster and is more serious in babies, young children, and older adults.
Rehydration drinks replace fluids and electrolytes. Plain water doesn’t provide necessary nutrients or electrolytes and may not be absorbed with diarrhea.
Rehydration drinks don’t make diarrhea or vomiting go away faster, but they can prevent serious dehydration from developing.
Oral rehydration solutions (ORSs), such as Pedialyte, are used to prevent or correct dehydration in young children. ORSs contain the right mix of salt, sugar, potassium, and other minerals to help replace lost fluids.

Importance of Oral rehydration therapy (ORT)

Oral rehydration therapy (ORT) is a type of fluid replacement used as a treatment for dehydration. It involves drinking water mixed with sugar and salt, while continuing to eat. When dehydration is severe, the therapy also includes supplemental zinc. Caretakers are taught the signs of worsening dehydration. The World Health Organization and UNICEF specify indications, preparations and procedures for ORT.

ORSL strategic fit to J&J portfolio?

Lets look into the portfolio of J&J’s consumer segment

Baby Care 

JOHNSON’S®
JOHNSON’S® BEDTIME™
JOHNSON’S® HEAD-TO-TOE® FRAGRANCE FREE BABY LOTION
BABY.com
DESITIN®
NATUSAN®
BABYCENTER®.com
PENATEN®
PRIM’AGE®

Skin and Skin Care
BEBE®
CLEAN & CLEAR®
ROC®
VENDOME®
NEUTROGENA®
JOHNSON’S®
skin ID™
ROGAINE®
AVEENO®
LUBRIDERM®
PIZ BUIN®

Wound Care & Topicals 
BAND-AID® Brand Adhesive Bandages
BENGAY®
SAVLON®
NEOSPORIN®
CORTAID®
DAKTARIN®
COMPEED®
TUCKS® Hemorrhoidal Ointment
Johnson & Johnson RED CROSS® Brand
Over-the-Counter Medicines
TYLENOL®
SUDAFED®
PEPCID®
NICORETTE®
MOTRIN®
IMODIUM®
DOLORMIN®
BENADRYL®
MYLANTA®
ZYRTEC® and ZYRTEC-D®12-HOUR®

Nutritionals 
SPLENDA®
BENECOL®
LACTAID®

Vision Care 
VISINE®
ACUVUE® Brand Contact Lenses

Comments on the deal – 

By observing J&J’s consumer product portfolio, ORSL can really a strategic fit into it’s Nutritional product segment. Presence of ORSL will definitely boost market presence of J&J ‘s nutritional business.