HYDERABAD (Reuters) – Indian contract drug manufacturer Suven Pharmaceuticals 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 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)
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