Suven Pharmaceuticals has entered into an agreement to acquire a 67.5% stake (amounting to 51% shared capital) of Sapala Organics for Rs 229.5 crore in an all-cash deal.
Suven, a contract development and manufacturing organisation for pharma companies, plans to jointly operate Sapala’s business with other selling shareholders for the next few years and then acquire 100% shareholding in Sapala beyond FY27.
As per the terms of the agreement, existing shareholders will continue to exercise minority stake over the years.
Hyderabad-based Sapala Organics is focused on Oligo drugs and nucleic acid building blocks. It recorded sales of Rs 67 crore in FY24 and had an adjusted EBITDA of around 45%, the company said in a statement.
Oligo, or Oligonucleotide drugs, are used in the treatment of neurodegenerative diseases, respiratory disorders, diabetic retinopathy, and some cancers.
The 100% acquisition post-FY27 is expected to be in the range of 13-15X EBITDA multiple and is linked to Sapals’s financial performance for the next three years.
“Nucleic acid based therapy targets diseases at a genetic level and has the potential to help patients immensely and cure previously incurable conditions. With this acquisition, we now have multiple differentiated technology platforms such as ADCs and Oligos amongst others,” noted Annaswamy Vaidheesh, Executive Chairman, Suven
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Sapala is led by Dr P Yella Reddy, who has done extensive research in nucleic acid chemistry. He will continue to run the business as CEO and will also be associated with Suven+Chance platform as a strategic advisor for the Japan market.
“A strategic partner like Suven, with its wider reach and resources will help to take Sapala to the next level while providing significant growth and development opportunities for Sapala’s employees as well,” he said in a statement.
Staedmount Capital Advisors and Banyan Advisory acted as advisors to Sapala.
Edited by Kanishk Singh
