Shares of Sequent Scientific Ltd, which is in animal health business, rose over 12 percent on September 27 after it announced Rs 8,000-crore merger with Viyash Life Sciences.
The Carlyle Group portfolio companies announced the swap ratio for the merger. Viyash shareholders to get 56 equity shares of Sequent for every 100 Viyash equity shares and Sequent will be the surviving listed entity once the scheme is effective.
The rationale for the merger is to "build a unique, differentiated, global end-to-end integrated platform with leadership in animal pharmaceuticals, supported by strong operating and R&D backbone", said the companies in an investor presentation.
Viyash has 10 manufacturing plants, including one in New Jersey, US. It is a manufacturer of active pharmaceutical ingredients (APIs) and formulations for drugs in the human health segment.
At 11:25 am on September 27, Sequent Scientific's shares were trading 12 percent higher at Rs 214.2 apiece.
The companies said the merger will "create an integrated business with a strong in-house R&D and manufacturing platform with strengthened supply chain - Combined entity to have 5x higher manufacturing capacity, 6x larger R&D team size, 9x higher number of USFDA facilities and 8x higher new product filings potential. Turbocharge growth engines to solidify market leadership in animal health market. Opportunity to capture growth in the broader global pharmaceuticals market".
Sequent Scientific posted revenue of around Rs 1,400 crore in FY24 and had EBITDA of Rs 100 crore. It has seven manufacturing sites in India, Spain, Brazil and Turkey.
“We are thrilled to announce a transformative step in our journey towards creating a unique, differentiated global leader in animal health with integrated capabilities," said Sequent’s chief executive officer, Rajaram Narayanan.
Narayanan said the merger would help build Sequent’s research and development capabilities.
“We believe that in order to continue to deliver differentiated value to our customers in times to come, it is imperative to scale up our product development and R&D capabilities to capture the market opportunity we are seeing and to build on our leadership in the animal health market."
Viyash’s founder Haribabu Bodepudi who was formerly the chief operating officer of global drug major Mylan (now known as Viatris) hailed thecombination.
“This merger brings together two complementary businesses that share a commitment to innovation, operational excellence, and delivering world-class solutions for our customers”, said Haribabu Bodepudi, who currently officiates as Viyash’s chief executive officer.
At Thursday’s closing price the value of the combined entity with the expansion in its capital base will be around Rs 8,192 crore.
Viyash is already a qualified supplier for intermediates to Sequent for one of the largest active pharmaceutical ingredients (API) that Sequent manufactures for the US market, as per the disclosure.
The combined entities will have 16 manufacturing plants out of which 10 are US
Food and Drug Administration approved plants.
JM Financial acted as the financial advisor to Sequent.
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