Advent International Corp, one of the world’s largest private equity firms, is set to purchase a controlling stake in India’s Suven Pharmaceuticals Ltd for at least 63.13 billion rupees (US$763.7 million), triggering an open offer to buy further shares in the family-run firm.
The buyout firm agreed to acquire 50.1 percent of Suven from the Jasti family, an exchange filing yesterday showed.
The stake purchase also set off a mandatory offer to minority shareholders from Advent under which it can buy as many as 66.19 million shares — or another 26 percent stake — for 495 rupees each, the same price it is paying the founders for the majority stake.
Suven’s stock rose by 4.9 percent during trading in Mumbai yesterday before paring almost all of those gains to trade at 497 rupees. India’s benchmark S&P BSE Sensex advanced by 0.8 percent.
“Our vision for Suven is to build a US$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,” Advent managing director Pankaj Patwari said.
The firm would look to acquire other global businesses “to build capabilities and gain new customers’ access,” he added.
For Advent, which has made more than 50 healthcare investments in 16 countries over the past three decades, the Suven deal adds to its growing portfolio in India, where it has bought majority stakes in engineering services company Encora and consumer durables firm Eureka Forbes.
Advent would also explore a potential merger of Suven, which is based in the Indian pharmaceutical hub of Hyderabad, with its portfolio firm, Cohance Lifesciences Ltd, to build a company specialized in contract development, manufacturing and active pharmaceutical ingredients.
The rout in global stocks has kept the head of Advent’s India business, Shweta Jalan, increasingly busy because more deals are being routed into the private-equity space, she said in May.
She has steered clear of India’s fintech space, where start ups are too early-stage or too expensive for her firm’s strategy, which leans toward investments in late-stage cash-generating businesses.
Advent’s key investment areas would continue to be healthcare, consumer, financial services and information technology in India, she said at the time.
Suven founder Venkateswarlu Jasti would be party to the deal announced yesterday, but would not be selling the 2,000 shares he holds.
Jasti would resign from the company’s board and as its managing director on completion of the deal, although he might provide some consultancy services as a chief adviser.
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