Advent to Acquire Majority Interest in Suven Pharma for $762 Million

Advent International Corp., a major global private equity firm, has agreed to purchase a majority stake in India's Suven Pharmaceuticals Ltd. for a minimum of 63.13 billion rupees ($762 million). This will be followed by an open offer to purchase additional shares from the family-run company.

The buyout firm has come to an agreement to purchase 50.1% of Suven from the Jasti family, as stated in a filing with the exchange on Monday. This stake purchase has triggered a mandatory offer to minority shareholders from Advent, in which they can buy up to 66.19 million shares, or an additional 26% stake, for 495 rupees each, the same amount they are paying the founders for the majority stake.

On Monday, Suven saw a 4.9% increase in trading in Mumbai, though it eventually settled at 497 rupees. India's S&P BSE Sensex also experienced a 0.8% rise.

Pankaj Patwari, managing director at Advent, expressed that the goal for Suven is to become a billion-dollar global leader. To achieve this, the firm plans to execute their product pipeline, acquire new customers, and increase their manufacturing and R&D capabilities. Additionally, they will look to acquire other global businesses to gain access to new customers and build their capabilities.

Advent has been investing in health care for the past three decades, and the Suven deal is just another addition to its growing portfolio in India. The company has already acquired majority stakes in the engineering services company Encora and consumer durables firm Eureka Forbes.

As the stock market has taken a downturn, private valuations in India have seen a decrease during the Advent season.

Advent is considering a possible merger between Suven, located in Hyderabad, India's pharmaceutical center, and Cohance Lifesciences, one of its portfolio companies. This would create a business focused on contract development, manufacturing, and active pharmaceutical ingredients.

The recent decline in global stocks has kept Shweta Jalan, the head of Advent's India business, quite busy as more deals are being directed towards the private-equity sector, as she told Bloomberg News in May. She has avoided India's booming fintech industry, as the startups there are either too early in their development or too costly for Advent's strategy, which focuses on investments in late-stage, cash-producing companies.

Advent has stated that their primary areas of investment will remain in the health care, consumer, financial services, and information technology sectors in India.

Venkateswarlu Jasti, the founder of Suven, will be involved in the agreement that was declared on Monday, but will not be selling the 2,000 shares that he owns. Jasti will step down from the company's board and his role as managing director once the deal is finalized, although he may still offer some consulting services as a primary advisor.