Advent To Buy Suven Pharma In A Rs 9,589-Crore Deal
Advent Capital intends to explore a merger of Suven Pharma with its wholly owned Cohance Lifesciences.
Global private equity investor Advent International has agreed to buy Suven Pharmaceuticals Ltd. in a deal worth more than Rs 9,500 Crore Deal
Advent intends to acquire a 50.1% from the Jasti family, the promoters of the contract manufacturer, according to an exchange filing. The private equity firm will buy 12.75 crore shares at Rs 495 per share for a total of Rs 6,313 crore.
Since the agreement is to acquire voting rights in excess of 25% of the equity share capital, the transaction would trigger an open offer under the takeover code to acquire an 26% of the public shareholding at Rs 495 per share, the company said. If fully subscribed, that would cost additional Rs 3,276 crore, taking the total deal value to Rs 9,589 crore.
The share purchase agreement allows Advent International to acquire equity shares in one or up to two tranches. The investor also has the right to pick up not more than 2% additional capital from the promoters in the second tranche.
Following the transfer of the promoter stake and the open offer:
Advent Capital will own 76.1% of the company.
Jasti Property and Equity Holdings Pvt., in its capacity as sole trustee of the Jasti Family Trust, will continue to own a 9.9% stake.
The acquisition is subject to regulatory approvals and conditions.
Advent Capital intends to explore a merger of Suven Pharma with its wholly owned portfolio company Cohance Lifesciences.
The intention is to create an end-to-end contract development and manufacturing organisation and an active pharmaceutical ingredients player servicing both the pharma and specialty chemical markets.
"We plan to build on Suven’s capabilities and make it one of the global leaders in the CDMO space," said Shweta Jalan, managing partner and head of Advent International in India, in an exchange filing. "We intend to explore a merger of Cohance with Suven in a manner that is synergistic and accretive for Suven’s shareholders."
According to Pankaj Patwari, managing director at Advent International the combined entity will have three massive growth vectors across pharma CDMO, specialty chemicals, and merchant API, each of which has strong macro tailwinds. "There are strong front-end and operational synergies between the two businesses that will be leveraged,” he said.
The vision is to build Suvena into a $1 billion global leader by executing effectively on the product pipeline, building new marquee customers, turbo-charging business development, and scaling up manufacturing and R&D, Patwari said. "We will also look at acquiring synergistic businesses globally to further build capabilities and gain new customer access.”
Brief Background Of Transacting Entities
Suven Pharma
Suven Pharma was demerged from its parent entity, Suven Life Sciences, in 2020.
It is present in the India pharma contract development and manufacturing organization, or CDMO, space with a compounded annual growth rate of more than 20% over the last four years.
It has Ebitda margins of over 43%, as per the filing.
It does around 90% of its business with innovators and follows the customer from Phase 1 to commercialisation. It has a strong pipeline of Phase 3 and late Phase 2 molecules with more than 100 active projects.
Cohance Lifesciences
Cohance Lifesceinces was formed in November 2022 by bringing together three Advent portfolio companies: RA Chem Pharma, ZCL Chemicals, and Avra Laboratories.
It has two business units, CDMO and active pharmaceutical ingredients, that cater to development and manufacturing for pharma and specialty chemical innovators.
It recorded revenues of around Rs 1,280 crores in FY22 and has grown at over 21% CAGR organically in the last two years.
Advent International
Advent has invested over $10.4 billion across 51 companies in healthcare globally.
Its previous healthcare investments in India also included Bharat Serums and Vaccines.
