Suven Pharma Acquires 51% of Sapala Organics
Suven Pharma has acquired 51% of Sapala Organics' share capital (67.5% fully diluted) for about INR 2,295 million. The remaining stake will be acquired post FY2026-27, aiming for full ownership by Q2 FY24-25
by Damodharan N
Updated Jul 13, 2024
Table of Content
Suven Pharmaceuticals has completed the acquisition of 51% of the share capital of Sapala Organics, equivalent to 67.5% on a fully diluted basis. The transaction, following a disclosure made on June 13, 2024, valued at approximately INR 2,295 million, is subject to customary working capital adjustments and net debt considerations.
Suven plans to complete the acquisition of the remaining equity stake post FY2026-27, ensuring full ownership of Sapala Organics by the second quarter of FY24-25, subject to customary closing conditions.
The acquisition, primarily financed through cash consideration, aligns with Suven's strategy to expand into the high-growth Oligo building blocks and nucleic acid space, leveraging Sapala's expertise in specialized manufacturing.
Official Announcement Here
An earlier intimation of the same Here
Market Reaction
Following Suven Pharmaceuticals' announcement of acquiring 51% of Sapala Organics on June 13, 2024, its stock on the NSE exhibited significant volatility and trading activity. The stock's price ranged from a low of Rs 656.00 to a high of Rs 889.70 during this period, with notable volumes observed on days such as July 11, 2024, when nearly 9.74 lakh shares were traded.
Investors' reactions reflected heightened interest and fluctuating sentiment surrounding Suven Pharma's strategic acquisition move in the pharmaceutical sector.
Check the Share Price on NSE Here
Suven Pharmaceuticals
Suven Pharmaceuticals Limited, established in 2018 through a demerger from Suven Life Sciences Limited, specializes in Contract Research And Manufacturing Services (CRAMS) now known as CDMO business.
Listed on NSE and BSE since March 2020, Suven focuses on Custom Synthesis, Process R&D, Scale Up, and Contract Manufacturing of intermediates, APIs, and Formulations.
With a robust growth rate of over 16% annually and impressive EBITDA margins exceeding 40%, Suven serves primarily innovators, boasting a substantial pipeline of Phase 3 and late Phase 2 molecules across 100+ active projects.
Sapala Organics
Sapala Organics Pvt. Ltd., founded in 2005 in Hyderabad, specializes as a Contract Development and Manufacturing Organization (CDMO) focusing on Oligo drugs and nucleic acid building blocks.
It stands out for its expertise in complex, specialized building blocks such as Phosphoramidites, Nucleosides, and drug delivery compounds like GalNAc. With a dedicated R&D team of over 100 members out of its 250+ workforce, Sapala serves innovator pharmaceutical companies and diagnostic firms worldwide.
In FY24, it achieved sales of INR 670 million with an impressive adjusted EBITDA margin exceeding 45%, highlighting its strong position in the industry.
Suven Pharma Acquires 51% of Sapala Organics - FAQs
1. What did Suven Pharmaceuticals acquire from Sapala Organics?
Suven Pharmaceuticals acquired a majority stake of 51% in Sapala Organics, which translates to controlling 67.5% of the company after considering all possible shares.
2. How much did Suven Pharmaceuticals pay for the acquisition?
The acquisition cost Suven Pharmaceuticals approximately INR 2,295 million.
3. When does Suven Pharmaceuticals plan to acquire the remaining stake in Sapala Organics?
Suven Pharmaceuticals aims to complete the full acquisition of Sapala Organics by the second quarter of FY24-25, which will give them complete ownership after the current fiscal year.
4. What is Suven Pharmaceuticals' strategy behind acquiring Sapala Organics?
Suven Pharmaceuticals aims to expand its presence in the growing market for Oligo building blocks and nucleic acids, leveraging Sapala's specialized manufacturing capabilities.
5. How was Suven Pharmaceuticals' stock price affected by the acquisition news?
Following the announcement, Suven Pharmaceuticals' stock price fluctuated significantly, ranging from Rs 656.00 to Rs 889.70, with high trading volumes indicating investor interest and reactions.
6. What does Suven Pharmaceuticals specialize in?
Suven Pharmaceuticals specializes in Contract Research And Manufacturing Services (CRAMS), now referred to as CDMO business, catering primarily to innovator pharmaceutical companies.
7. What are Sapala Organics' key areas of expertise?
Sapala Organics specializes in complex and specialized building blocks such as Oligo drugs, nucleic acids like Phosphoramidites and Nucleosides, and innovative drug delivery compounds such as GalNAc.
8. How many active projects does Suven Pharmaceuticals have?
Suven Pharmaceuticals is actively involved in over 100 projects, including late-stage Phase 2 and Phase 3 clinical trials for various pharmaceutical products.
9. What was Sapala Organics' sales achievement in FY24?
In the financial year 2023-2024, Sapala Organics achieved sales totaling INR 670 million, reflecting its strong market position and revenue generation capabilities.
10. How many employees does Sapala Organics have?
Sapala Organics employs more than 250 professionals, including a dedicated team of over 100 researchers and developers focused on advancing their specialized product offerings.