Blackstone, Advent in talks to buy stake in Suven Pharma
2 min read . Updated: 04 Nov 2022, 02:08 AM IST
Premium- Advent has been lapping up pharma firms in the past two years, but for Blackstone, this is its first bid to buy a pharma company.
Private equity investors Blackstone and Advent International are in separate talks with the promoters of Suven Pharmaceuticals Ltd to buy a controlling stake, two people aware of the development said.
“The sale process has been going on for a few months, and now Blackstone and Advent are in the final round of bidding for the controlling stake in Suven Pharma. The promoters are looking to sell at least half of their stake in the company, which will also trigger an open offer for 26% of the public shareholding in the company," one of the two people said on the condition of anonymity.
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Promoters, led by Venkateswarlu Jasti, own a 60% stake in Suven Pharma, which has a market value of ₹6,378 crore. The sale of at least half of their shareholding will put the deal size at more than ₹3,000 crore, followed by a 26% open offer, which, if successful, could see the eventual buyer spend an additional ₹1,600-1,700 crore.
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In 2019, Suven Life Sciences demerged its contract manufacturing business into Suven Pharmaceuticals to unlock value. The company went public in March 2020.
Blackstone and Advent declined to comment on the development, while an email sent to Suven Pharmaceuticals remained unanswered.
While Advent has been aggressively acquiring companies in the Indian pharma sector over the past two years, for Blackstone, this will be the first attempt to buy a pharma company.
“PE firms have been on a buying frenzy in the pharma sector since covid. The likes of Advent, Carlyle, PAG and KKR have acquired companies from formulations to active pharmaceutical ingredient makers and contract drug development and research companies. But Blackstone, which has made large and very successful buyout bets in other sectors, has so far stayed away from pharma. Hence, it is expected to put a very competitive bid for this asset," the second person added.
On the other hand, Advent has set up a platform to acquire and manage pharma assets which started with the acquisition of RA Chem Pharma in October 2020, followed by the acquisitions of controlling stakes in ZCL Chemicals in March 2021 and Avra Laboratories in April 2022.
On 1 November, Advent announced the launch of Cohance Lifesciences, a new brand identity for its API and CDMO platform, which would comprise the three portfolio companies of RA Chem Pharma, ZCL Chemicals and Avra Laboratories.
The company intends to add more assets in the future to become one of the top three drug raw materials and contract development and manufacturing organization in India, Advent said in a statement.
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