Indian company Elder Pharmaceuticals has agreed to acquire NeutraHealth for around £12.19 million.

Elder is to finance the transaction from its $18 million (£11.5 million) loan agreement with Mumbai-based Axis Bank.

Elder Pharmaceuticals was established in 1983 in India. The company manufactures a range of pharmaceutical products through research and development as well as through licensing agreements with international pharmaceutical companies. Elder currently holds around 21.1 per cent of the issued shares in NeutraHealth.

Jagdish Saxena, executive chairman of Elder, comments: ‘European expansion, which we believe the acquisition of NeutraHealth can offer us, is an important part of our growth strategy. The acquisition would not only offer us entry into major European markets but create potential cost-efficiencies through the backward integration of products manufactured by NeutraHealth.’

Birmingham-based NeutraHealth was established in 2004 and admitted to AIM in 2005 with a strategy of acquiring companies in the nutraceutical market. Last year the company declared a pre-tax profit of £900,000 on a turnover of £34.6 million and had net assets of £24.4 million.