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- 27 Dec 2022
- ICICIdirect Research
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ADVENT INTERNATIONAL PLANS TO ACQUIRE 50% STAKE IN SUVEN PHARMA
COHANCE - 991 Change: 8.80 (0.90 %)Advent International plans to acquire 50.1% stake in Suven Pharma along with the mandatory open offer to acquire additional 26% at a price of Rs 495. Advent also plans to merge Cohance Lifesciences (Advent’s CDMO and API platform) with Suven Pharma to create synergies by using the former's CDMO and API platform. The open offer and subsequent merger is expected to happen in the next five to six months. The details of the merger and new board members are yet to be disclosed by the company. Suven Pharma’s promoters would have a lock in of 18 months post merger before they could dilute their remaining share holding. Cohance is a diversified CDMO & API company catering to pharma and specialty chemical customers globally. FY22 Sales were Rs 1280 crore; EBITDA Rs 365 crore. Revenue breakup- API 70%, CDMO 30%. 22%/28% CAGR growth in topline and EBITDA over FY20-FY22 and 33% ROCE in the same period. The company operates through seven plants with total capacity expected to reach 1700 KL for API and intermediates by FY24.
The Advent acquisition deal looks promising and fairly valued but it is coming with a caveat of merger with another company, Cohance which is the investee of Advent. The apprehension is indeed with the merger ratio, which is yet to be disclosed. We await the merger details to emerge post which we can value the combined entity.