Suven announces merger of Cohance Lifesciences, forging CDMO capability in India
Suven Pharmaceuticals and Cohance Lifesciences have announced a proposed scheme of amalgamation for the merger of Cohance with Suven.
Share Distribution Post Merger
- Upon the scheme becoming effective, all shareholders of Cohance will be issued shares of Suven at the ratio of 11 shares of Suven for every 295 shares of Cohance, based on the swap ratio.
- The new shares of Suven so issued will be traded on the NSE and BSE.
- Advent entities shall own 66.7% and the public shareholders will hold 33.3% of the combined entity, pre- ESOP dilution.
- The overall transaction is expected to conclude over next 12-15 months subject to receipt of all relevant shareholder and regulatory approvals.
About Cohance
- Cohance is a leading CDMO and Merchant API platform with global leadership in select low-mid volume molecules as well as unique capabilities in the form of its antibody drug conjugates (ADC) platform.
- Their CDMO segment has grown at healthy CAGR of 30%+ over FY20-23 and contributes ~44% to its gross profits for 9mFY24.
Impact of Merger
- Strategic benefits of the merger are that it strengthens Suven’s CDMO industry leadership position with niche capabilities and scale benefits.
- The merged entity is expected to be amongst leading integrated CDMO players in India.
- The merged platform will comprise three distinct business units: Pharma CDMO, Spec Chem CDMO, and API+ (inclusive of formulations).
- It will provide access to GMP facilities. On the costs side, the benefits include sourcing materials through common vendors, cost optimization across the platform, potentially lower investments in G&A as we leverage resources across the platform (vs standalone) and sharing of best practices across the platform.
Words from Suven Chairman
Annaswamy Vaidheesh, executive chairman, Suven said, “This is a transformative step in Suven’s journey of growth and building a respected integrated CDMO player. We are extremely excited about the benefits of combined scale, capabilities, complementary customer base and best practices that will further help enhance our leadership position in India and globally.”
Dr V Prasada Raju, managing director, Suven, said, “The combination helps us drive multiple synergies both on revenue and cost front.”
Words from Suven MD
Commenting on the proposed merger, Pankaj Patwari, board member, Suven and managing director, Advent International said, “We are just starting on the integrated CDMO journey and are quite excited to build a global leader in the space. With this combination, we will have a solid base for each of our three engines and we will invest behind each one of them, both organically & inorganically, thereby consolidating the CDMO space.
