Global private equity investor Advent International on Monday said it is acquiring a significant stake in Suven Pharmaceuticals from its promoters, the Jasti family.
The PE major said this will be followed with an open offer to acquire 26 per cent more in the listed contract development and manufacturing organisation from public shareholders, and also merge the company with investee company Cohance Lifesciences, as per an official statement.
Media reports on a Monday morning pegged the acquisition at Rs 6,300 crore, and that Advent had pipped rival Blackstone for the acquisition.
The Advent statement said it has entered into a definitive agreement to acquire significant stake in Suven subject to regulatory approvals and conditions.
It intends to explore the merger of portfolio company Cohance with Suven to build a leading end-to-end Contract Development and Manufacturing Organization (CDMO) and merchant Active Pharmaceutical Ingredient (API) player servicing the pharma and specialty chemical markets, the statement added.
The merger will be evaluated by the board taking into consideration the strategic rationale and accretiveness to Suven's public shareholders, the statement said.
Suven's managing director Venkateswarlu Jasti said Advent is a strategic investor in the business, which has been reporting industry-leading growth and margins.
"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," he said, adding that the merger with Cohance is also a win-win.
Advent's managing director Pankaj Patwari said the PE fund wishes to build a $1 billion global leader through the acquisition by executing effectively on the product pipeline, building new marquee customers, turbo-charging business development, and scaling up manufacturing and R&D.
"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," Shweta Jalan, managing partner and head of Advent International in India, said.
Suven was demerged from its parent entity, Suven Life Sciences, in 2020, and has been growing revenues at over 20 per cent over the last 4 years, and expanded its operating profit margins by over 43 per cent.
It does 90 per cent of its business with innovators and follows the customer from Phase 1 to commercialization, the statement said, adding that Cohance is fully owned by Advent and had a revenue of Rs 1,280 crore in FY22.
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.
