The founders of SeQuent Scientific Ltd are looking to sell their stake in the Mumbai-based pharmaceutical company, people privy to the development told VCCircle.
SeQuent founders Arun Kumar and KR Ravishankar have appointed US-based investment bank JP Morgan to find a buyer, the people said, asking not to be named. Some potential investors have already been approached, they said.
JP Morgan didn't respond to a request for comment. SeQuent Scientific managing director Manish Gupta declined to comment on what he called market speculation. But he said that SeQuent has scaled up well in the last four years to emerge as India’s largest animal health company with annual revenue in excess of Rs 1,000 crore.
The founders and other promoter group entities control a 56.5% stake in the company, which makes pharmaceutical products for animal health. Private equity firm Ascent Capital owns a 5.73% stake, stock-exchange data show.
The people cited above didn’t give any other details about the potential transaction. However, The Economic Times reported earlier in the day that the co-founders were looking to exit in a deal that could value SeQuent up to Rs 2,500 crore ($348.4 million at current exchange rates).
The report also said that potential investors that had been approached include pharmaceutical companies and private equity funds. It added that Ascent Capital would also sell its stake as part of the proposed transaction.
Shares of SeQuent jumped as much as 5% on Wednesday morning to Rs 71 apiece on the BSE, before paring the gains. The shares were trading 3% higher at Rs 69.65 apiece in afternoon trade, giving the company a market valuation of Rs 1,719.5 crore. This means the founders are seeking a premium of about 45%.
SeQuent functions in the animal health business through subsidiary Alivira Animal Health. It also provides analytical services. The company reported consolidated net profit of Rs 56.87 crore on net sales of Rs 1,039.30 crore for the financial year ended March 2019, according to VCCEdge, the data research platform of Mosaic Digital.
SeQuent and its two co-founders are also promoters of two other listed companies – Strides Pharma Science Ltd and Solara Active Pharma Sciences Ltd. The company holds 3.7% of Strides and 2.14% of Solara.
