Suven-Cohance Lifesciences merger announced to create 1st listed PE-led contract manufacturer in Indian pharma
Advent International on Thursday announced the merger of privately held Cohance Lifescience with listed Suven Pharma to create the 1st private equity led listed contract manufacturing company, making it one the largest largest such home grown CDMO platform Divi’s Lab’s
For every 295 shares of Cohance, 11 new shares of Suven will be issued, the companies said in a statement after the Suven board meeting.
Suven has been 50% owned by Advent with the remaining with public and institutional shareholders while Cohance is wholly owned by the PE group. Now post merger, Advent will own 66.7% in the combined entity and the public shareholders the rest.
Suven has been valued at 31 times 12 months trailing (December) EBITDA at approximately Rs 532 crore crore while Cohance has been valued at a 30% percent discount to Suven’s multiples because it’s a combination of a CDMO and API businesses. Other similar peers like Laurus Labs, Shilpa Medicare, NewLand Labs and Piramal Pharma trades at 15% discount to Suven Pharma over a 2-3 year period.
Suven’s pre-merger market cap is Rs 16, 500 crore. Post the merger the implied value of the company will be around Rs 24,000-25,000 crore.
Other private equity peers like Carlyle and PAG too have created similar platforms but they are smaller in scale so far.
Cohance is a culmination of acquisition of RE Chem in mid 2020 and subsequent roll up buyouts of two more assets ZCL Chemicals and Avra Labs between 2020-2022. The three were there subsumed under the Cohance Lifesciences platform.
