Transaction:
- J.B. Chemicals & Pharmaceuticals Limited (JBCPL), a pharmaceutical company announced that it will acquire brands for the India market from Sanzyme Private Limited (Sanzyme), a player in the probiotics and reproductive health segment in the country.
- The transaction is valued at Rs.628 crore and the consideration payable by JBCPL is in cash.
J.B. Chemicals & Pharmaceuticals Limited:
- Established in 1976, J.B. Chemicals & Pharmaceuticals Ltd. (JBCPL) is an Indian pharmaceutical company and a player in hypertension segment. Besides India its other two home markets are Russia and South Africa. In India, the company has five brands among the top 300 brands in the country. The company exports its finished formulations to over 30 countries including the USA.
- Besides supplying branded generic formulations to several countries, it also manufactures medicated lozenges. It has seven manufacturing facilities in India including a dedicated manufacturing facility for medicated lozenges.
Sanzyme Private Limited:
- Sanzyme was founded as UNISANKYO LTD. It was first established in 1969 as an Indo-Japanese pharmaceutical venture. In 2011, the company became a completely Indian entity and was rechristened as Sanzyme.
- Sanzyme Private Limited is engaged in the manufacture, distribution and marketing of specialty probiotics formulations, infertility management products and nutraceuticals products. It operates in the gastroenterology, nephrology, urology and gynecology therapy areas with brands such as Sporlac, Lobun, and Gynogen.
- It has pan-India distribution network which caters to 300,000 pharmacists and reaches 100,000 doctors.
Rationale:
- The acquisition will mark JBCPL’s entry into the fast-growing probiotics, therapeutic nutraceuticals and reproductive health market.
- JBCPL’s has strategy of building diversified pharmaceutical business in India comprising of quality brands. Post the transaction, JBCPL would be able to further scale up and institutionalize the acquired brands within the territory of India.
- Nikhil Chopra, CEO & Whole-time Director, J.B. Chemicals & Pharmaceuticals Limited commented that they are glad to announce their first acquisition which expands their presence into new therapeutic areas and also increases the addressable opportunity in the India pharma market. This is in line with their stated objective of building big brands through category leaders. Sanzyme has been a pioneer in the probiotics segment and they wish to build further on this legacy.
- The turnover of Sanzyme Private Limited for FY20 was Rs.194 crore and for FY21 was Rs.130 crore from which the turnover of brands acquired was Rs.88 crore in FY21.
- US private equity giant KKR acquired about 54 per cent stake in JB Chemicals for around Rs 3,100 crore in July 2020. As per the agreement KKR’s holding in JB Chemicals has been capped at 64.90%.
Acknowledgements:
RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)
Disclaimer:
This material has been prepared by the personnel in Vora Corporate Finance which is Investment Banking arm of Vora Management Consultancy Private Limited and looks after Mergers & Acquisitions (M&A), Private Equity (PE), Fund Raising, Debt syndication and Valuations and is based out of Ahmedabad, Gujarat, India. Any views or opinions expressed herein are solely that of individual authors and may differ from view of Vora Management Consultancy Private Limited. This material is proprietary to Vora Management Consultancy Private Limited and is for your personal use only. Any distribution, copy, reprints or forward to others is strictly prohibited.
This material captures the information based on information available in the public domain, public announcements and sources believed to be reliable. Analysis contained herein is based on publicly available information and appropriate assumptions. This material is intended merely to highlight market developments and is not intended to be comprehensive and does not constitute strategic, investment, legal or tax advice. In no event Vora Management Consultancy Private Limited be liable for any use by any party or for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you for evaluating any transaction.
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