Suven Pharmaceuticals’ promoters, the Jasti family, will sell 50.1 per cent of the company to global private equity investor Advent International for Rs 6,313.08 crore.
It was disclosed in the company’s regulatory filing.
Advent International, through its manager Kotak Mahindra Capital, has announced an open offer to acquire an additional 26 per cent stake in the company from public shareholders, with a total outlay of Rs 3,276.25 crore if fully subscribed.
The offer was triggered by Advent’s share purchase agreement with the promoters to acquire over 12.75 crore shares, representing a 50.1 per cent stake in Suven Pharmaceuticals, for Rs 495 per equity share.
Through the open offer, Advent proposed to acquire up to 6,61,86,889 equity shares constituting 26 per cent of the voting share capital for Rs 495 per share.
In a statement, Advent said it has entered into a definitive agreement to acquire a significant stake in Suven Pharmaceuticals, subject to regulatory approvals and conditions.
Advent further said it intends to explore the merger of portfolio company Cohance with Suven to build a leading end-to-end Contract Development and Manufacturing Organisation (CDMO) and merchant Active Pharmaceutical Ingredient (API) player, servicing the pharma and speciality chemical markets.
The merger will be evaluated by the board taking into consideration the strategic rationale and accretiveness to Suven’s public shareholders.
Suven Pharmaceuticals Managing Director Venkateswarlu Jasti stated during a conference call that the deal is expected to close in five to six months and that the details of the proposed merger with Cohance, including the share swap ratio, are still being worked out.
Analysts, on the other hand, expressed concerns about the proposed merger with Cohance during the conference call.
Jasti assured the investors that a conference call with Advent representatives would be scheduled as soon as possible.
After the transaction is completed, Jasti will step down as Managing Director and serve as the company’s chief adviser.
He added that the merger with Cohance is also a win-win situation because it will allow the company to offer a broader set of services and multi-sites to its customers.
Advent’s managing director, Pankaj Patwari, stated that the PE fund hopes to acquire a $1 billion global leader by effectively executing on the product pipeline, acquiring new marquee customers, turbo-charging business development, and scaling up manufacturing and research and development.
“We plan to build on Suven’s capabilities and make it one of the global leaders in the CDMO space. We intend to explore a merger of Cohance with Suven in a manner which is synergistic and accretive for Suven’s shareholders,” Shweta Jalan, Managing Partner and Head of Advent International in India, said.
Suven was spun off from its parent company Suven Life Sciences in 2020, and it has grown revenues by more than 20 per cent over the last four years while increasing operating profit margins by more than 43 per cent.
According to the statement, Cohance does 90 per cent of its business with innovators and follows the customer from Phase 1 to commercialisation. It is fully owned by Advent and had a revenue of Rs 1,280 crore in FY22.
Advent has been investing in India since 2007, and its Mumbai office was established in 2009. It currently has over $3.2 billion invested/committed across 14 companies with headquarters or operations in India in sectors such as business and financial services, retail, consumer and leisure, healthcare, industrial, and technology.
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