INSUBCONTINENT EXCLUSIVE:
Global private equity giant Advent International said on Monday it was buying a 50.1 per cent stake in Hyderabad-based Suven
Pharmaceuticals for Rs 6,313 crore, and was planning to merge it with its portfolio company Cohance Lifesciences
The promoter Jasti family will hold only 9.9 per cent stake in the firm if the deal goes through
The deal would be subject to regulatory approvals and conditions.
Advent will launch an open offer for another 26 per cent stake at Rs 495
If the open offer is fully subscribed, Advent will have to pay another Rs 3,276 crore and the total deal size would jump to Rs 9,589
crore.
In a conference call, Suven Pharma Managing Director (MD) Venkateswarlu Jasti said the deal was expected to be closed in five to
six months and the details of the proposed merger with Cohance were still being worked out, including what could be the share swap
ratio.
Suven Pharma, which was demerged from its parent entity Suven Life Sciences in 2020, is one of the major players in the India pharma
contract development and manufacturing (CDMO) space
It has clocked a growth of over 20 per cent CAGR over the last 4 years, and a profitability of over 43 per cent Ebitda (earnings before
cent.
Jasti said there was an 18-month lock-in period for the promoters to hold their residual stake in Suven Pharmaceuticals, although
they had no plans to sell it as long as it created value not just for the shareholders but for themselves.
Jasti would cease to be the MD
of the company and will provide consultancy services as chief advisor after the deal is completed
The company does around 90 per cent of its business with innovators and has a strong pipeline of Phase 3 and late Phase 2 molecules with
over 100 active projects.
Advent intends to explore the merger of Cohance with Suven to build a leading end-to-end CDMO and merchant API
(active pharmaceutical ingredients) player servicing the pharma and specialty chemicals markets.
Jasti said they were delighted to bring
network of professionals and experts
Their experience and resources will launch the next phase of growth for Suven Pharma
The proposed collaboration with Cohance is a win-win for Suven and its public shareholders
It will help us offer a broader set of services and multi-sites to our customers."
The merger will be evaluated by the board taking into
effectively on the product pipeline, building new marquee customers, turbo-charging business development, and scaling up manufacturing and
Suven and Cohance's combined entity will have three growth vectors across pharma CDMO, specialty chemicals and merchant API.
