Mehta aims for participation in international markets
Torrent Pharmaceuticals Limited has entered into definitive agreements to acquire controlling stake in Mumbai-listed J. B. Chemicals and Pharmaceuticals (JB Pharma) from global investor KKR at an equity valuation of Rs.25,689 crores.
The transaction marks a significant step in Torrent’s ambition to create a future-ready, diversified healthcare platform combining a deep chronic segment heritage with emerging international Contract Development and Manufacturing Organisation (CDMO) capabilities, Torrent said on 29 June.
The transaction will be executed in 2 phases:
Acquisition of 46.39% equity stake (on a fully diluted basis) through a Share Purchase Agreement (SPA) at a consideration of Rs.11,917 crores (Rs.1,600 per share) followed by a mandatory open offer to acquire up to 26% of JB Pharma shares from public shareholders at an open offer price of Rs.1,639.18 per share.
In addition to the above, Torrent has also expressed its intent to acquire up to 2.80% of equity shares from certain employees of JB Pharma at the same price per share as KKR.
The transaction will be followed by a merger between Torrent and JB Pharma through a scheme of arrangement. As per the approval given by the Board of Directors of both companies, upon merger of JB Pharma with Torrent, every shareholder holding 100 shares in JB Pharma shall receive 51 shares of Torrent.
Torrent Executive Chairman Samir Mehta explained, “Torrent’s deep India presence and JB Pharma’s fast growing India business, combined with the CDMO and international footprint offers immense potential to scale both revenue and profitability.
“This strategic alignment furthers our goal of strengthening our presence in the Indian pharma market, and build a larger diversified global presence. Moreover, the CDMO platform provides a new long-term avenue of growth for Torrent.”
Gaurav Trehan, Co-Head of Asia Pacific and Head of Asia Pacific Private Equity, KKR, and CEO of KKR India, elaborated, “JB Pharma’s transformation under our stewardship is a testament to KKR’s ability to scale high-quality companies.
“We are proud to have collaborated with JB Pharma’s management team, led by Nikhil Chopra, to bring the breadth of KKR’s global experience and operational expertise to support the company’s organic and inorganic growth, and help JB Pharma become one of India’s fastest growing branded pharmaceutical companies. We believe the company is well-positioned for continued growth ahead and wish the team every success in its next chapter with Torrent.”
Nikhil Chopra, Chief Executive Officer and Whole Time Director of JB Pharma, remarked, “Over the past five years, JB Pharma has emerged as one of India’s fastest growing pharmaceutical players, owing to KKR’s strategic guidance, stewardship of our independent directors and a focused strategic and executional excellence by the management team.
“We have built a strong foundation to deliver market-leading growth, as well as consistent improvement in profitability in the medium and long term. As we now enter a new chapter alongside Torrent Pharmaceuticals, we are confident that the combined strengths of our organizations will unlock greater opportunities to enhance healthcare access across our markets.”
Torrent Pharma is a leading player in the Indian pharmaceutical sector, concentrating on the chronic and sub-chronic therapeutic segments. The Company has established itself as a leader in developing niche pharmaceutical solutions through its patient-centric innovation. It also has a strong global presence across Brazil, Germany, and the United States.
J.B. Pharma (BSE: 506943 | NSE: JBCHEPHARM | ISIN: INE572A01028), is one of the fastest growing pharmaceutical companies in India and a leading player in the hypertension segment. Besides its strong India presence, which accounts for majority of its revenue, its other two home markets are Russia and South Africa. In India, the company has six brands among the top 300 IPM brands in the country. The company exports its finished formulations to over 40 countries including the USA, and is also a leading CDMO player in the segment of medicated lozenges. It has eight state-of-the-art manufacturing facilities in India including a dedicated manufacturing facility for lozenges. The manufacturing facilities are certified by leading regulators across the world. Fiinews.com
