ET in its online edition on Thursday afternoon reported first about talks between Sequent Scientific and Viyash Life Sciences for a ₹7,000 crore-₹8,000 crore merger.
In a stock exchange filing, Sequent Scientific said its board has approved a proposal to merge Viyash Life Sciences and its group companies, and its wholly owned subsidiary Sequent Research with it.
Shares of Sequent Scientific rose 18% on Friday, hitting a three-year high of ₹224.80 on the BSE, before closing 14.15% up at ₹217.35. Viyash Life Sciences isn’t listed.
AgenciesAccording to the disclosure, for every 100 shares held, Viyash Life Sciences shareholders will receive 56 Sequent Scientific shares. This will increase the capital base of Sequent Scientific to nearly 429 million shares from 249 million, with its promoter and promoter group holding around 62.4% stake in the combined entity.
For the financial year 2023-24, Sequent Scientific had posted an operating profit of around ₹100 crore. Viyash Life Sciences’ operating profit for the fiscal year was around ₹150 crore.Sequent Scientific chief executive Rajaram Narayanan said the merger would help build the company’s R&D 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,” he said.
Viyash Life Sciences founder Haribabu Bodepudi was previously the chief operating officer of global drug major Mylan (now Viatris).
The two entities said they propose to leverage each other’s global customer base and technical skills. The merger is expected to expand their marketing presence across geographies, facilitate backward integration and create procurement synergies.
Viyash is already a qualified supplier for intermediates to Sequent Scientific for one of the largest active pharmaceutical ingredients it makes for the US market, as per the disclosure.
The combined entities will have 16 manufacturing plants out of which 10 are approved by the US Food and Drug Administration.
JM Financial and Ernst & Young acted as financial advisors to Sequent Scientific and Viyash Life Sciences, respectively, on the merger.
Law firm AZB and Partners advised Sequent Scientific and Trilegal advised Viyash Life Sciences.
KPMG and PwC were independent valuers and ICICI Securities provided a fairness opinion on the swap ratio recommended by the valuers, as per the stock exchange notification.