Torrent Pharmaceuticals, headquartered in Gujerat, India, has signed definitive agreements for the acquisition of a controlling stake in JB Chemicals and Pharmaceuticals (JB Pharma) from global investment firm KKR at an equity valuation of Rs256.89bn ($3bn) on a fully diluted basis.
The move is part of Torrent's strategy to create a diversified healthcare platform that combines its chronic segment expertise with growing international contract development and manufacturing organisation capabilities.
The acquisition will take place in two stages. Initially, Torrent will purchase a 46.39% equity stake through a share purchase agreement at a price of Rs119.17bn.
This will be followed by a mandatory open offer to public shareholders to acquire up to 26% of JB Pharma shares at Rs1,639.18 per share.
Torrent intends to buy up to 2.8% of equity shares from JB Pharma employees at the same price per share as offered to KKR.
Following the acquisition, a merger between Torrent and JB Pharma will be executed through a scheme of arrangement. Shareholders of JB Pharma will receive 51 shares of Torrent for every 100 shares held post-merger, as approved by the boards of directors of both companies.
The acquisition will provide Torrent with access to a fast-growing Indian franchise, major chronic segment brands and new therapeutic areas such as ophthalmology.
It will also strengthen Torrent's market share in the Indian pharmaceutical market (IPM) and offer operational synergies across business functions.
JB Pharma CEO and whole time director Nikhil Chopra stated: “As we now enter a new chapter alongside Torrent Pharmaceuticals, we are confident that the combined strengths of our organisations will unlock greater opportunities to enhance healthcare access across our markets.”
The share purchase agreement and the merger scheme are subject to standard statutory and regulatory approvals, including from the Stock Exchanges, Securities and Exchange Board of India, the Competition Commission of India, the National Company Law Tribunal and other relevant authorities.
Moelis & Company and NovaOne served as financial advisors, and Khaitan & Co as legal counsel to Torrent. Ernst and Young Merchant Banking Services and BDO Valuation Advisory acted as independent valuers for Torrent and JB Pharma respectively.
KKR's financial advisors were Kotak Investment Banking and Rothschild & Co. Shardul Amarchand Mangaldas & Co provided legal counsel to JB Pharma and KKR.
Goldman Sachs (India) Securities and AZB & Partners advised JB Pharma on financial and legal matters respectively.
