Suven Pharma falls 2% as Advent picks majority stake in the company

Shares of Suven Pharmaceuticals erased early gains to fall 2% to Rs 490 in Monday’s intraday trade after Advent International decided to buy a majority stake in the company from the Jasti family. Advent's offer is being accepted by Suven's board in preference to a rival bid from Blackstone, the only other contender.

Suven in a BSE filing said that Advent will buy 51% of the promoter’s stake in the company. It also said that Advent would make an additional open offer for up to 26% of the voting share capital held by public shareholders at a price of Rs 495 per share. The open offer is for a total consideration of Rs 3,276 crore.

Post the completion of this acquisition, Advent intends to explore the merger of its portfolio company, Cohance Lifesciences with Suven, to build a leading end-to-end CDMO and merchant API player servicing the pharma and specialty chemical markets, it said.


Advent is using Cohance Life Sciences as the vehicle for the acquisition. The platform was created last month for its active pharmaceutical ingredient (API) and contract development and manufacturing businesses comprising three portfolio companies — RA Chem Pharma, ZCL Chemicals and Avra Laboratories.

Advent is expected to pay close to Friday’s market price – Rs 500/share -- Rs 504/share to buy the promoter’s stake, implying a payout of Rs 6,350 crore, according to an ET report.

Promoters Venkateswarlu Jasti and his family split Suven Life Sciences in FY20, listing the contract research and manufacturing services (CRAMS) business separately via a demerger scheme. The promoters own 60% of the company. Following the stake sale, their holding would stand at 9.9%.

Kotak Mahindra Capital and Barclays are the advisors to the deal. Shardul Amarchand Mangaldas and Cyril Amachand Mangaldas are the legal advisors.

At 10.03 am, the scrip was trading 0.4% lower at Rs 496.35 over its previous day’s closing price of Rs 498.2 apiece. The stock in opening deals jumped 5% to Rs 520. The stock has surged nearly 9% in the last one month, while it has risen only about 2% year-to-date.