Torrent Pharma gains after inking pact to acquire majority stake in JB Chemicals & Pharma
Torrent Pharmaceuticals added 2.22% to Rs 3,418.60 after the company entered into definitive agreement with KKR to acquire controlling stake in JB Chemicals and Pharmaceuticals at an equity valuation of Rs 25,689 crore.
Shares of JB Chemicals & Pharmceuticals declined 6.63% to Rs 1,680.05 on the BSE.
The acquisition would provide access to a fast growing India franchise, with leading brands in the chronic segment, and entry into untapped therapeutic areas like ophthalmology. It strengthens market share in the IPM for Torrent and offers operational synergies across multiple business functions.
The deal also supports platform diversification through entry into the CDMO segment with long-term potential. Additionally, it facilitates consolidation in key international markets and greater ability to scale up.
The transaction will be executed in two phases. In first phase, the company will acquire 7,44,81,519 equity shares, representing a 46.39% stake at Rs 1,600 per share, for a total consideration of Rs 11,917 crore from the promoter seller, KKR.
Additionally, the company plans to acquire up to 44,99,782 shares, representing a 2.80% stake at the same price of Rs 1,600 per share, from certain employees of JB Chemicals & Pharmaceuticals. Furthermore, the company will launch an open offer to acquire 4,17,45,264 equity shares or 26% stake at Rs 1,639.18 per share from public shareholders of JB Chemicals & Pharmaceuticals.
In second phase, the company will merge with JB Pharma through a scheme of arrangement. As per the approved by the board of directors of both companies, shareholders of JB Pharma will receive 51 shares of Torrent for every 100 shares held in JB Pharma upon completion of the merger.
Samir Mehta executive chairman, Torrent, commented: We are pleased to have on board the JB Pharma heritage and build on the platform for the future. Torrents deep India presence and JB Pharmas fast growing India business, combined with the CDMO and international footprint offers immense potential to scale both revenue and profitability. This strategic alignment furthers our goal of strengthening our presence in the Indian pharma market, and build a larger diversified global presence. Moreover, the CDMO platform provides a new long-term avenue of growth for Torrent.
Gaurav Trehan, co-head of Asia Pacific and head of Asia Pacific Private Equity, KKR, and CEO of KKR India, said: JB Pharmas transformation under our stewardship is a testament to KKRs ability to scale high-quality companies. We are proud to have collaborated with JB Pharmas management team, led by Nikhil Chopra, to bring the breadth of KKRs global experience and operational expertise to support the companys organic and inorganic growth, and help JB Pharma become one of Indias fastest growing branded pharmaceutical companies. We believe the company is well-positioned for continued growth ahead and wish the team every success in its next chapter with Torrent.
Torrent Pharma is the flagship company of the Torrent Group. It is amongst the Top 5 in the therapeutics segments of Cardiovascular (CV), Gastro Intestinal (GI), Central Nervous System (CNS) and Cosmo-Dermatology. It has 8 manufacturing facilities, of which 5 are USFDA approved.
J.B. Chemicals & Pharmaceuticals is a public listed company primarily engaged in the business of manufacturing and marketing of diverse range of pharmaceutical formulations.
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