In a significant acquisition in the pharmaceutical sector, Torrent Pharmaceuticals Ltd on Sunday entered into definitive agreements to acquire controlling stake of 46.39 per cent stake in J. B. Chemicals and Pharmaceuticals from global investment firm KKR for Rs 11,917 crore at a price of Rs 1,600 per share.
Torrent will also make a mandatory open offer to acquire another 26 per cent of JB Pharma shares from public shareholders at an open offer price of Rs 1,639.18 per share. After the open offer, the total cost of acquisition will come to Rs 13,556 crore.
The acquisition was made at an equity valuation of Rs 25,689 crore (on 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 (contract development and manufacturing organization) capabilities.
As per the approval given by the board of directors of both companies, after the merger of JB Pharma with Torrent, every shareholder holding 100 shares in JB Pharma will receive 51 shares of Torrent.
In addition to this, 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. The merger between Torrent and JB Pharma will be through a scheme of arrangement.
KKR, a US-based private equity giant, acquired about 54 per cent stake in JB Chemicals and Pharmaceuticals, one of the oldest pharma companies in India, for Rs 3,100 crore in July 2020. It acquired the stake from the founding Mody family at a purchase price of Rs 745 per share and made an open offer for an additional 26 per cent of the company.
Samir Mehta, Executive chairman, Torrent, said: “Torrent’s deep India presence and JB Pharma’s fast growing India business, combined with the CDMO and international footprint offers immense potential to scale both revenue and profitability. This strategic alignment furthers our goal of strengthening our presence in the Indian pharma market, and build a larger diversified global presence. Moreover, the CDMO platform provides a new long-term avenue of growth for Torrent.”
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Torrent Pharma, which has a market valuation of Rs 1.13 lakh crore, closed higher by 3.68 per cent at Rs 3344.40 on the BSE on Friday. JB Chemicals, with a market capitalisation of Rs 28,080 crore, reported a revenue of Rs 3,722 crore in FY25. Its shares closed 2.72 per cent higher at Rs 1799.35 on the BSE.
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 amongst the top 5 in the therapeutics segments of cardiovascular (CV), gastro Intestinal (GI), central nervous system (CNS) and cosmo-dermatology. It is a specialty-focused company with 76 per cent of its revenues in India from chronic and sub- chronic therapies. It has presence in 50 plus countries. Torrent has 8 manufacturing facilities, of which 5 are USFDA approved.
JB 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 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. It has eight state-of-the-art manufacturing facilities in India including a dedicated manufacturing facility for lozenges
