Acquisitions continue to be on the radar for Suven Pharmaceuticals, that has just announced its proposed merger with Cohance Lifesciences.
The private equity-driven company is scouting for technologies and companies to add to its strengths as a CDMO (contract development and manufacturing organisation), Annaswamy Vaidheesh, Suven Executive Chairman, told businessline. It is a global business with international clientele and the company continues to look for technologies, in India or overseas, he said.
Suven Pharmaceuticals and Cohance Lifesciences had announced, late on Thursday, a proposed scheme of amalgamation to merge both companies – a transaction that is expected to be sealed in 12-15 months. Once complete, private equity firm Advent would own about 66.7 per cent and the rest being with public shareholders.
Advent’s fourth
In fact, Advent International had (in December 2022) agreed to acquire a 50.1 per cent stake in Suven Pharmaceuticals from the Jasti family for ₹6,313 crore — one of the largest pharma deals in recent years. This was Advent’s fourth.
In November 2022, Cohance Lifesciences (wholly-owned by Advent) was formed by bringing together three Advent portfolio companies — RA Chem Pharma, ZCL Chemicals and Avra Laboratories.
Some rejig
While regulatory and shareholder approvals are awaited, Vaidheesh said he did not expect rationalising of the multiple manufacturing facilities between the different companies. Each production site has its particular role to play, and is mapped to international customers, he explained.
On the research front though, he said the research and development sites will see consolidation into one site at Genome Valley. And common functions like Finance and Human Resources could also be “leveraged”, he said, indicating some reorganisation.
The combined entity will have 12 manufacturing facliities, including Suven’s five and Cohance’s seven. The final entity would have five research centres, including a single facility from Suven. While Suven’s revenues for the year ended March 2023 stood at ₹1,340 crore, the merged entity is pegged at ₹2,677 crore.
On the company’s final employee strength, he said, it was too soon to comment, on any change in workforce as the merger process takes time and needed to be analysed.
The combined entity will, once approved, will have three growth engines — pharma CDMO, speciality chemicals CDMO, and APIs (active pharmaceutical ingredients). Cohance shareholders will be issued 11 equity shares of Suven for every 295 equity shares held in Cohance.
Suven Pharma shares ended up 9.38 per cent on BSE at ₹690.05