Private equity player Advent International has entered into a definitive agreement to acquire significant stake in Suven Pharmaceuticals from the Jasti family.
Last month, it was reported that private equity majors Advent and Blackstone were in discussions for the deal.
Post the completion of this landmark acquisition, Advent intends to explore the merger of its portfolio company, Cohance Lifesciences with Suven, to build a leading end-to-end CDMO and merchant API player servicing the pharma and specialty chemical markets, the firm said in a regulatory filing.
As part of the deal, Advent will also be making an open offer to acquire additional 26% of the outstanding equity shares of the company from the public shareholders.
The financial details of the deal were not disclosed.
As per the Mint report, the promoters, led by Venkateswarlu Jasti, own a 60% stake in Suven Pharma, which has a market value of Rs 6,378 crore. The sale of at least half of their shareholding will put the deal size at more than Rs 3,000 crore, followed by a 26% open offer, which, if successful, could see the eventual buyer spend an additional Rs 1,600-1,700 crore.
“Advent is the ideal partner for us, with deep expertise in healthcare, and a global network of professionals and experts. Their experience and resources will launch the next phase of growth for Suven pharma. 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 of Suven Pharmaceuticals Ltd, in a statement.
Suven Pharma which was demerged from its parent entity Suven Life Sciences in 2020. At present, it is major player in the Indian pharma CDMO space growing over 20% over the past four years. It does 90% of its business with innovators following the customer from Phase 1 to commercialisation. It has a strong pipeline of Phase 3 and late Phase 2 molecules with 100-plus active projects.
“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 R&D. We will also look at acquiring synergistic businesses globally, to further build capabilities and gain new customer access” said Pankaj Patwari, Managing Director at Advent International.
He added, "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.”
Advent has been investing in India since 2007 and founded its Mumbai office in 2009. Currently, it has invested/committed over $3.2 billion 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. 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.