Private equity firm Advent International has entered into an agreement to acquire significant stake in Hyderabad-based Suven Pharmaceuticals from the Jasti family, subject to regulatory approvals.
The deal is said to be valued at ₹6,300 crore, for a 50.1 percent stake (₹495 per share), a representative for the company told businessline.
Post acquisition, Advent intends to explore the merger of its portfolio company Cohance Lifesciences with Suven to build an end-to-end contract development and manufacturing organisation (CDMO) and merchant active pharmaceutical ingredient (API) player servicing the pharmaceutical and specialty chemical markets, a note from Advent said.
The merger will be evaluated by the board taking into consideration the strategic rationale and accretiveness to Suven’s public shareholders and will be subject to regulatory approvals and other customary approvals, it added.
As part of the transaction, Advent will also be making an open offer to acquire an additional 26 percent of the outstanding equity shares of the company from the public shareholders.
“Our vision for Suven is to build 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 research and development,” said Pankaj Patwari, Managing Director at Advent International.
“The potential combination of Suven and Cohance has the ability to become a powerhouse operating across the pharmaceutical value chain. The combined entity will have three massive growth vectors across pharma CDMO, speciality chemicals and merchant API, each of which have strong macro tailwinds. There are strong front-end and operational synergies between the two businesses which will be leveraged” addedPatwari.
Advent’s experience and resources will help in launching the next phase of growth for Suven pharma, said its promoter.
“This move will benefit Suven platform immensely. 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” said Venkateswarlu Jasti, Managing Director at Suven Pharmaceuticals Ltd.
“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,” added Shweta Jalan, Managing Partner and Head of Advent International in India.
Suven’s growth
Suven Pharma, which was demerged from its parent entity Suven Life Sciences in 2020, is a key player in the CDMO segment with growth over 20 percent CAGR over four years, the company said.
Cohance Lifesciences is wholly-owned by Advent and was formed in November 2022 to create a new brand identity for its CDMO and API platform, with an intention of bringing together three Advent portfolio companies–RA Chem Pharma, ZCL Chemicals and Avra Laboratories.
Cohance’s two business units, CDMO and API+, cater to development and manufacturing for pharma and specialty chemical innovators, and global generic companies with complex product requirements respectively. It has seven manufacturing facilities.
Cohance recorded a total proforma revenue of ₹1,280 crores in FY22. Advent has been investing in India since 2007. It has invested/committed over $3.2 billion across 14 companies, across sectors.
Previous healthcare investments in India also include Bharat Serums and Vaccines. Globally, Advent has invested over $10.4 billion across 51 companies in healthcare.
Advent was advised on this transaction by Kotak Investment Banking and Avendus Capital, while Suven had Barclays Bank Plc as their exclusive financial advisor, the note said.