Torrent to acquire KKR’s stake in JB Pharma for US$1.4 billion

Torrent Pharmaceuticals agreed to take a controlling stake in JB Chemicals & Pharmaceuticals from private equity firm KKR, the latest sign of a dealmaking boom in India.

Torrent will buy a 46.4 per cent stake in the company known as JB Pharma from KKR for 1,600 rupees per share, according to a statement on Sunday (Jun 29), amounting to about US$1.4 billion. Torrent will also launch a mandatory open offer to acquire up to 26 per cent of the company at about 1,639 rupees per share.

Torrent also plans to buy as much as 2.80 per cent of JB Pharma from certain employees at the same price it’s paying for the KKR stake. The two companies plan to merge through a scheme of arrangement, according to the statement.

JB Pharma shares have slid around 2.3 per cent this year, giving the company a market value of around US$3.3 billion. The shares closed at 1,801.4 rupees on Friday in Mumbai.

Torrent shares have been little changed this year, valuing the firm at about US$13.2 billion.

KKR bought the majority stake in JB Pharma in 2020 from the founding Mody family, along with making an open offer for an additional 26 per cent holding. The exit represents a return of more than fivefold for the private equity firm, according to a source with knowledge of the matter who declined to be identified discussing private figures.

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A representative for KKR declined to comment on the return.

India is seeing a surge in deals, both in equity capital markets and mergers and acquisitions, as investors seek to tap the country’s growth. On Friday, JSW Group agreed to buy up to 75 per cent of Akzo Nobel’s Indian business as the conglomerate seeks to expand its presence in areas such as paints.

KKR had been working with advisers to help evaluate options including a sale of its stake in JB Pharma, Bloomberg News reported last year. Local press including The Economic Times had reported earlier this week that Torrent was in advanced discussions to buy KKR’s stake in JB Pharma.

Established in 1976, JB Pharma produces a range of pharmaceuticals in areas such as gastroenterology, hypertension, dermatology and diabetes, according to its website. It exports its tablets, capsules, creams and other formulations to more than 40 countries, including the US. BLOOMBERG