Advent International to acquire a significant stake in Suven Pharmaceuticals from the Jasti family

Mumbai : Advent International (“Advent”), one of the largest and most experienced global private equity investors, has entered into a definitive agreement to acquire significant stake in Suven Pharmaceuticals (“Suven Pharma” or “Suven”) from the Jasti family, subject to regulatory approvals and conditions. Post the completion of this landmark acquisition, Advent intends to explore the merger of its portfolio company, Cohance Lifesciences (“Cohance”) with Suven, to build a leading end-to-end CDMO and merchant API player servicing the pharma and specialty chemical markets. The merger will be evaluated by the board taking into consideration the strategic rationale and accretiveness to Suven’s public shareholders and will be subject to regulatory approvals and other customary approvals.

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

“We are delighted to bring Advent into Suven Pharma as a strategic investor. We have built a business with industry leading growth & margins. We have cultivated excellent relationships with multiple global innovator companies backed by deep R&D capabilities and demonstrated track record of execution and delivery excellence. 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 Mr. Venkateswarlu Jasti, Managing Director at Suven Pharmaceuticals Ltd.

“We are extremely pleased with this win-win transaction. We believe that Suven is a world class CDMO with a credible track record and a great roster of clientele to its name. 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.” said Ms. Shweta Jalan, Managing Partner and Head of Advent International in India.

Suven Pharma, which was demerged from its parent entity, Suven Life Sciences, in 2020, is one of the leaders in the India pharma CDMO space with high growth (>20% CAGR over last 4 years) and profitability (>43% EBITDA margins). Suven does ~90% of its business with innovators and follows the customer from Phase 1 to commercialization. It has a strong pipeline of Phase 3 and late Phase 2 molecules with 100+ 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 Mr. Pankaj Patwari, Managing Director at Advent International.

Cohance Lifesciences (www.cohance.com), wholly owned by Advent, was formed in November 2022 to create a new brand identity for its CDMO and API platform, with an intention of bringing together three Advent portfolio companies – RA Chem Pharma, ZCL Chemicals and Avra Laboratories. Cohance’s two business units, CDMO and API+, cater to development and manufacturing for pharma and specialty chemical innovators, and leading global generic companies with complex product requirements respectively. It has seven manufacturing facilities. Cohance recorded a total proforma revenue of ~INR 1,280 crores (FY 2021-22) and has grown at a market leading >21% 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” added Mr. Pankaj Patwari.

Advent has been investing in India since 2007 and founded its Mumbai office in 2009. Currently, it has invested/committed over $3.2 billion across 14 companies with headquarters or operations in India in sectors such as business and financial services, retail, consumer and leisure, healthcare, industrial and technology. Previous healthcare investments in India also include Bharat Serums and Vaccines. Globally, Advent has invested over US$ 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.