Advent confirms buying significant stake in Suven Pharma

Private equity investor Advent International on Monday confirmed that it has entered into a definitive agreement to acquire a significant stake in Suven Pharmaceuticals.

Advent intends to explore the merger of its portfolio company CohanceLifesciences with Suven to build an end-to-end CDMO and merchant API
player servicing the pharma and specialty chemical markets, the PE player said in an exchange filing.

As part of the transaction, Advent will also be making an open offer to acquire an additional 26percent of the outstanding equity shares of the company from public.

“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. This move will benefit Suven platform immensely. The proposed collaboration with Cohance is a win-win for Suven and its public shareholders. It will help us offer a broader set of services and multi sites to our customers” said Venkateswarlu Jasti, Managing Director of Suven Pharmaceuticals Ltd, in a statement.

On February 12, 2020, Moneycontrol was the first to report that Suven Lifesciences was evaluating sale plans of Suven Pharma, the demerged CRAMS arm. The report had added that investment bank Barclays had been appointed as the deal advisor.

On her part, Shweta Jalan, Managing Partner and Head of Advent International in India, said her company plans 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.”

Suven Pharma which was demerged from its parent entity Suven Life Sciences in 2020 and it is major player in the Indian pharma CDMO space with growth rate averaging above 20 percent and operating margin beyond 43 percent through the last four years. Suven does 90 percent of its business with innovators and follows the customer from Phase 1 to commercialisation. It has a strong pipeline of Phase 3 and late Phase 2 molecules with 100-plus active projects.

“Our vision for Suven is to build a $1-billion global leader by executing effectively on the product pipeline, building new marquee customers, turbo-charging business development, and scaling up manufacturing and R&D. We will also look at acquiring synergistic businesses globally to further build capabilities and gain new customer access” said Pankaj Patwari, Managing Director at Advent International.

Cohance Lifesciences, wholly owned by Advent, was formed in November 2022 to create a new brand identity for its CDMO and API platform, with anintention of bringing together three Advent portfolio companies – RA Chem Pharma, ZCL Chemicals and Avra Laboratories. It has seven manufacturing facilities. Cohance recorded a total proforma revenue of Rs 1,280 crore for
2021-22 and has recorded over 21 percent CAGR organically in the last two years.

“The potential combination of Suven and Cohance has the ability to become a powerhouse operating across the pharmaceutical value chain. The combined entity will have three massive growth vectors across pharma CDMO, speciality chemicals and merchant API, each of which have strong macro tailwinds. There are strong front-end and operational synergies between the two businesses which will be leveraged” Patwari said.

Advent has been investing in India since 2007 and founded its Mumbai office in 2009. It has invested or 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. Previous healthcare investments in India also
include Bharat Serums and Vaccines. Globally, Advent has invested over $10.4 billion across 51 companies in healthcare.

Advent was advised on this transaction by Kotak Investment Banking and Avendus Capital while Suven had Barclays Bank Plc as their exclusive financial advisor. Moneycontrol