India’s J.B. Chemicals and Pharmaceuticals is ready to fly the nest of private equity firm KKR, with Torrent Pharmaceuticals taking over KKR’s 46.39% controlling stake in the drugmaker for 119 billion rupees ($1.4 billion).
The deal merges J.B. Pharma into Torrent’s fold, bolstering the latter company's vision of creating a “future-ready, diversified healthcare platform,” Torrent explained in a June 29 release (PDF).
The combination of the India-based pharma companies "offers immense potential to scale both revenue and profitability,” Torrent’s executive chairman, Samir Mehta, noted in the release.
J.B. Pharma’s CDMO platform, specifically, provides a “new long-term avenue of growth” for Torrent, Mehta added.
Torrent’s buyout implies a total equity valuation of 256.89 billion rupees ($3.01 billion) for J.B. Pharma. After acquiring its controlling stake through a share purchase agreement, Torrent can further purchase up to 26% of J.B.’s shares from public shareholders at a pre-defined price, according to the release.
In addition, Torrent says it has communicated an interest in purchasing up to 2.80% of J.B. equity shares from “certain employees” of the acquired company.
KKR picked up its J.B. stake in 2020 and attributes the drugmaker's “transformation” to the asset manager's “ability to scale high-quality companies,” KKR India CEO Gaurav Trehan commented in the release.
“As we now enter a new chapter alongside Torrent Pharmaceuticals, we are confident that the combined strengths of our organizations will unlock greater opportunities to enhance healthcare access across our markets,” J.B. CEO Nikhal Chopra added.
With J.B. Pharma under its umbrella, Torrent will also reach previously untapped sectors such as ophthalmology.
Novartis sold off a clutch of “select ophthalmology brands” to J.B. in 2023 for around $116 million in a deal expected to go into effect at the start of 2027. The companies also worked out an arrangement that sees J.B. promoting and distributing the products for a three-year period that began in 2023.
J.B. Pharma’s strengths primarily lie in the hypertension segment, with much of its revenue coming from its home base of India and the six leading brands it markets in the country. The company also operates in Russia and South Africa and is a leading CDMO in medicated lozenges.
Torrent is another major player in the Indian pharma space. The company particularly dominates in the cardiovascular, gastrointestinal and central nervous system sectors in India but also has a leading presence in Brazil and Germany. Torrent boasts eight manufacturing facilities, five of which are FDA-approved. R&D is cited as the drugmaker's "backbone for growth," both domestically and overseas, with state-of-the-art R&D infrastructure housing more than 750 scientists, according to Torrent.