Advent takes controlling stake in Suven Pharmaceuticals

Private Equity major, Advent has confirmed that it has entered into a definitive agreement to acquire a controlling stake in Suven Pharmaceuticals (SP).

  • Advent is acquiring 50.1% from the promoters (Jasti Property and Equity Holdings Private Limited) at Rs 495/ share totalling Rs 6,313 cr.
  • Above considration is 100% cash payable by Advent to the promoters.
  • Post this transaction, Promotoers will be left with 9.9% stake in the Company.
  • Further, in line with the regulations, Advent has also announced open offer upto 26% at the same price of Rs 495/ share.
  • Paid price of Rs 495/ share is similar to the current market price of the Company and implies a trailing P/E of 29x.

(Please note that SP was demerged from its parent entity Suven Life Sciences in 2020 to specially focus on the CDMO space)

Why Advent is acquiring it?

Advent has disclosed in the filings that it intends to explore the merger of it’s umbrella CDMO entity, Cohance Lifesciences into SP and hence create an integrated, larger and listed franchise with the associated benefits.

  • Cohance, a wholly owned subsidiary of Advent, was formed to create a new brand identity for it’s integrated Contract Development & Manufacturing Organization (CDMO) and Merchant Active Pharmaceutical Ingredients (API) platform, to bring together it’s three existing portfolio companies
  • It has a total proforma revenue of Rs 1,280 crores (FY 2021-22)
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