Suven Pharmaceuticals Limited, a contract development and manufacturing organisation (CDMO), has received approval from the National Stock Exchange (NSE) and BSE for its merger with Cohance Lifesciences. A joint application has been filed with the National Company Law Tribunal (NCLT), with the merger expected to complete in 12-15 months.
The newly formed company is said to focus on three main verticals – pharma CDMO, agrochemicals CDMO, and active pharmaceutical ingredient (API) manufacturing. The management anticipates revenue and Ebitda growth for FY25, with acceleration in FY26. Over the next five years, the company aims to organically double its business and enhance growth through strategic mergers and acquisitions (M&A) opportunities.
Cohance, also a merchant API platform, specialises in select low-to-mid volume molecules and a unique antibody-drug conjugates (ADC) platform. The CDMO segment has experienced a robust compound annual growth rate (CAGR) of over 30 per cent from FY20-23, contributing approximately 42 per cent to its gross profits for FY24.
The merged platform boasts strong financial metrics, including Ebitda margins above 37 per cent and a return on capital employed (RoCE) exceeding 30 per cent, alongside robust cash flow generation. It is projected to drive an additional 10 per cent of Ebitda through revenue and cost synergies over the next 2-4 years.
Private equity firm Advent holds a 50.1 per cent stake in Suven Pharma and 100 per cent in Cohance. Post-merger, Advent will own 66.7 per cent of the combined entity, as per the company statement.
First Published: Jul 26 2024 | 9:54 PM IST
