ET first reported that Sequent Scientific and Viyash Life Sciences were in talks for Rs. 7000-8000 crore merger in its online edition on Thursday afternoon.
“The board of directors of the company… has approved a composite plan of merger for the merger of Viyash Life Sciences Private Limited and its group companies and Sequent Research Limited, a wholly owned subsidiary of the Company with the Company, as per Sections 230 to 232 and other applicable provisions of the Companies Act, 2013,” Sequent Scientific said in the stock exchange disclosure.
Scientific sequence is on the list and Viyash Life Sciences is not. In FY 2023-24, the former made operating profits of around Rs. 100 crore, while the latter had operating profits of around Rs. 150 crores.
Carlyle is a major shareholder in both companies.
“We are delighted to announce a transformative step in our journey towards creating a unique and differentiated global leader in animal health with integrated capabilities,” said Sequent CEO Rajaram Narayanan. Narayanan said the merger would help build Sequent’s research and development capabilities. “We believe that to continue offering differentiated value to our customers in the future, it is imperative to expand our product development and R&D capabilities to capture the market opportunity we are seeing and leverage our leadership. in the Animal Health market.”
Viyash founder Haribabu Bodepudi, who was previously COO of a major global pharmaceutical company. mylan (now known as Viatris) praised the combination.
“This merger brings together two complementary businesses that share a commitment to innovation, operational excellence and delivering world-class solutions to our customers,” said Haribabu Bodepudi, who currently serves as CEO of Viyash.
As per the disclosure, each Viyash Life Sciences shareholder will receive 56 Sequent Scientific shares for every 100 Viyash shares they own.
This will result in Sequent Scientific’s capital base expanding from the current 24,94,80,995 shares to 42,89,38,532 shares. The stake of the promoter and the promoter group will be around 62.4% in the combined entity.
At Thursday’s closing price, the value of the entity combined with the expansion of its capital base will be around Rs. 8192 crores.
The two entities propose to leverage each other’s global customer base and technical skills, they said. The merger is expected to expand its marketing presence across geographies, facilitate backward integration and create acquisition synergies.
Viyash is already a qualified supplier of intermediates to Sequent for one of the most important active pharmaceutical ingredients (APIs) that Sequent manufactures for the US market, according to the disclosure.
The combined entities will have 16 manufacturing plants of which 10 are US Food and Drug Administration approved plants.
JM Financial and Ernst & Young acted as financial advisors to Sequent Scientific and Viyash Life Sciences, respectively, in 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 fair opinion on the swap ratio recommended by the valuers, according to the stock exchange notification.
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