Advent acquires majority stake in India's Suven Pharma

The majority position is being acquired by various vehicles, including its 10th global flagship fund, which closed on USD 25bn last year. The seller is the Jasti family, which has called long-term plans to merge with Advent’s Indian pharma platform a “win-win.”

Advent is paying INR 495 per share, according to a December 26 filing. The stock is currently trading around INR 493, giving the company a market capitalization of approximately INR 125.6bn. This represents a seven-month high for the stock.

It coincides with plans to acquire an additional 26% from public shareholders for the same price per share. Assuming full acceptance of this offer, Advent will invest an additional INR 32.8bn.

The goal is to combine Suven with Advent’s India pharma platform, recently branded as Cohance Lifesciences. Cohance currently includes RA Chem Pharma (acquired in 2020 for an undisclosed sum, Avra Laboratories (acquired in 2022 for USD 100m), and ZCL Chemicals. Advent bought 51% of ZCL in 2021 for INR 17bn.

Cohance has seven manufacturing facilities and was said to have proforma revenue of INR 12.8bn for the 12 months ended March 2022 on the back of consecutive years of 21% year-on-year growth. Women’s health specialist Bharat Serums and Vaccines, which Advent acquired in late 2019 at a reported valuation of USD 500m, is not included.

The private equity is to create a leading contract manufacturing and drug R&D operator for the pharma and speciality chemical markets. Pankaj Patwari, a managing director at Advent said in a statement that Suven would be built into a USD 1bn company through M&A and scaling existing operations.

There will be a strong focus on active pharmaceutical ingredients (APIs), which represent the rudimentary chemicals used in drug production. India’s API players are seen as benefiting from a scaling back of the industry in historically dominant China. India is estimated to import as much as 90% of its APIs from China currently; the government wants to reduce that figure by 25% by 2024.

Suven Pharma, which was demerged from its parent entity, Suven Life Sciences, in 2020, is considered one of the major operators in its space. The company does 90% of its business with innovative drug developers, working with customers from phase-one trials through to commercialization. Revenue increased 30.7% during the 2022 financial year to INR 13.2bn, while profit rose 80.8% to 5.6bn.

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• Topics
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