Private equity giant Advent International-owned contract development and manufacturing organization (CDMO) Suven Pharma Saturday said it will acquire a controlling stake in US-based NJ Bio Inc. for $64.4 million (nearly Rs 550 crore).
Suven will acquire a 56% stake in NJ Bio, a technology-driven CDMO specializing in complex and innovative drug modalities, at a pre-money valuation of $100 million. The transaction will be structured as a combination of primary and secondary investments, according to a company statement.
The deal, expected to close this month, involves Suven paying $49.4 million to buy out existing minority shareholders and infusing $15 million in primary equity. The primary investment will mainly fund capital expenditure to expand operations at NJ Bio’s Princeton facility.
The transaction is valued at a low-to-mid-teens multiple of CY2025 projected EBITDA, the company said. Suven also secured a call option to acquire the remaining shares of NJ Bio and a put option for the existing shareholders to sell their stakes to Suven. These options will be exercisable after five years, enabling Suven to potentially own 100% of NJ Bio's equity.
“This transaction aligns with our vision of being a technology-led CDMO, offering end-to-end solutions in emerging modalities like ADCs,” Suven Executive Chairman Vivek Sharma said.
Based in Princeton, New Jersey, NJ Bio specialises in antibody-drug conjugates (ADCs) and other advanced drug conjugates (XDCs), which play a pivotal role in targeted therapeutics.
Upon completing the transaction, NJ Bio will become a subsidiary of Suven Pharma. It also has a subsidiary in India, NJBIO India Pharmaceutical Pvt Ltd, which will become a step-down arm of Suven.
NJ Bio’s turnover jumped to $21.6 million in 2023 from $17.7 million the previous year, and $6.5 million in 2021.
“Through NJ Bio, we deepen our expertise and offerings across the ADC value chain, from R&D to commercialization. NJ Bio’s capabilities in drug discovery and early-stage development give us an early entry point in the customer’s ADC drug development cycle,” Suven Managing Director V. Prasada Raju said.
The acquisition underlines Suven’s strategy of pursuing technology-focused acquisitions to strengthen its CDMO platform. This move follows its definitive agreement to acquire a 67.5% stake in Hyderabad-based Sapala Organics for Rs 229.6 crore ($27.5 million).
Also, Advent had announced its plan to merge its pharmaceutical portfolio companies – Cohance Lifesciences and Suven Pharmaceuticals – to create a diversified CDMO and API company.