India's Suven Pharma, Cohance merge to boost contract drug manufacturing services

Suven Life Sciences

29/02/2024 15:34

HYDERABAD, Feb 29 (Reuters) - Indian contract drug
manufacturer Suven Pharmaceuticals  SUVH.NS  said on Thursday it
will merge with Cohance Lifesciences in an all-share deal, as it
looks to further scale up its contract and development
manufacturing services (CDMO) business.
    The company, however, did not mention the deal value.
    Under the deal, all shareholders of privately held Cohance
will be issued 11 shares of Suven for every 295 shares of
Cohance based on the swap ratio, Suven said on Thursday.
    Private equity firm Advent International wholly owns Cohance
and has a significant stake in Suven Pharma, which was demerged
from its parent entity Suven Life Sciences  SUVP.NS  in 2020. 
    The combined entity, which Advent has been looking to merge
since 2022, will be 66.7% owned by Advent's entities and the
remaining 33.3% will be held by public shareholders, the company
said.
    The merged platform will comprise three distinct business
units - contract drug manufacturing of pharmaceuticals,
specialty chemicals and active pharmaceutical ingredients (API),
which are key elements added to drugs to produce desired health
effects.
    "Cohance's addition, particularly its fast-growing ADC
(antibody-drug conjugates used in treating cancer) platform,
reinforces our position as a leading CDMO platform," Suven said.
    The addition of Cohance's API business will scale up Suven's
formulation business, according to the company.
    India's contract drug manufacturers are seeing a boost in
their business as global pharmaceutical companies are looking
for services outside of China in an attempt to diversify their
supply chain.   
    "Proposed merger expected to be double-digit EPS accretive
(without synergies) from first year of it being effective,"
Suven said.
     The transaction is expected to conclude over the next 12-15
months subject to shareholder regulatory approvals, the company
said. 
    

     

($1 = 82.8699 Indian rupees)

 (Reporting by Rishika  Sadam; Editing by Shweta Agarwal)
 ((Rishika.S@thomsonreuters.com;))