Ahmedabad-based pharma major Torrent has sought the Competition Commission of India’s (CCI) clearance to acquire a majority stake in J B Chemicals and Pharmaceuticals in a Rs 19,500-crore deal, which would make Torrent India’s second most valued pharma company.
In June, Torrent global investment firm KKR announced that Torrent had entered into definitive agreements to acquire a controlling stake in J B Pharma from KKR at an equity valuation of Rs 25,689 crore (on a fully diluted basis), followed by a merger of the two entities.
The transaction marks a significant step in Torrent’s ambition to create a future-ready, diversified healthcare platform combining a deep chronic segment heritage with emerging international CDMO capabilities, Torrent said in a release.
The transaction will be executed in 2 phases:
1. Acquisition of 46.39% equity stake (on a fully diluted basis) through a share purchase agreement at a consideration of Rs 11,917 crore (Rs 1,600 per share) followed by a mandatory open offer to acquire up to 26% of JB Pharma shares from public shareholders at an open offer price of Rs 1,639.18 per share. In addition, Torrent has also expressed its intent to acquire up to 2.80% of equity shares from certain employees of JB Pharma at the same price per share as KKR.
2. The merger will happen through a scheme of arrangement. As per the approval given by the Board of Directors of both companies, upon the merger, every shareholder holding 100 shares in JB Pharma shall receive 51 shares of Torrent.
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. Torrent’s deep India presence and JB Pharma’s fast-growing India business, combined with the CDMO and international footprint, offer immense potential to scale both revenue and profitability. This strategic alignment furthers our goal of strengthening our presence in the Indian pharma market, and builds 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 Pharma’s transformation under our stewardship is a testament to KKR’s ability to scale high-quality companies. We are proud to have collaborated with JB Pharma’s management team, led by Nikhil Chopra, to bring the breadth of KKR’s global experience and operational expertise to support the company’s organic and inorganic growth, and help JB Pharma become one of India’s 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.”
Nikhil Chopra, chief executive officer and whole-time director of JB Pharma, remarked, “Over the past five years, JB Pharma has emerged as one of India’s fastest growing pharmaceutical players, owing to KKR’s strategic guidance, stewardship of our independent directors and a focused strategic and executional excellence by the management team. We have built a strong foundation to deliver market-leading growth, as well as consistent improvement in profitability in the medium and long term. As we now enter a new chapter alongside Torrent Pharmaceuticals, we are confident that the combined strengths of our organizations will unlock greater opportunities to enhance healthcare access across our markets.”
Torrent Pharma, with annual revenues of more than Rs 11,500 crore, is the flagship company of the Torrent Group, with group revenues of ~Rs 45,000 crore. It is among the Top 5 in the therapeutics segments of cardiovascular (CV), gastrointestinal (GI), central nervous system (CNS) and cosmeto-dermatology.
J.B. Pharma is one of the fastest-growing pharmaceutical companies in India and a leading player in the hypertension segment. Besides its strong India presence, which accounts for the majority of its revenue, its other two home markets are Russia and South Africa. In India, the company has six brands among the top 300 IPM brands in the country.
