Jubilant Pharma Ltd, a Singapore-based subsidiary of Mumbai-listed Jubilant Pharmova Ltd, will sell its entire stake in a US company as part of a larger deal that will help it score more than five-fold returns in a little more than three years.
Jubilant Pharma had in November 2020 invested $25 million (Rs 185 crore then) in Sofie Biosciences Inc., a radiopharmaceutical firm, and currently holds a 25.8% stake. It will now sell the stake for aggregate proceeds of about $139.43 million (Rs 1,158.8 crore), including certain preferred returns.
This means the company is making 5.5 times returns on its investment in dollar terms and more than six times in rupee terms, back-of-the-envelope calculations show.
Sofie develops molecular diagnostics and therapeutics. It has radiopharmaceutical production and distribution network, mature contract manufacturing services and high-value theranostic intellectual property. The US company has entered into a definitive merger agreement with private equity firm Trilantic Capital Partners. The transaction is expected to close by 30th June 2024, subject to customary conditions and regulatory approvals.
Jubilant Pharmova, earlier known as Jubilant Life Sciences Ltd, said it will receive the transaction proceeds in two stages. The company will first get $113.63 million, subject to certain customary adjustments at closing, upon completion of the merger. The balance sum of $25.8 million is contingent upon achievement of certain future milestones.
The Indian company said it plans to use these proceeds to reduce leverage and for capex and other corporate purposes.