Torrent Pharma Seals Deal for Controlling Stake in J. B. Chemicals from KKR

Torrent Pharmaceuticals to Acquire Controlling Stake in JB Pharma, Driving Significant Expansion in the Indian Pharmaceutical Market

MUMBAI, India–(BUSINESS WIRE)–
Torrent Pharmaceuticals Limited and global investment firm KKR have entered into definitive agreements for Torrent to acquire a controlling stake in J. B. Chemicals and Pharmaceuticals (JB Pharma) from KKR for an equity valuation of INR 25,689 crores on a fully diluted basis. This strategic acquisition will be followed by a merger of the two entities, marking a pivotal moment in Torrent’s ongoing efforts to build a robust, diversified healthcare platform that bridges its deep-rooted expertise in chronic segments with burgeoning international Contract Development and Manufacturing Organization (CDMO) capabilities.

The transaction is structured in two phases:

Torrent will acquire a 46.39% equity stake in JB Pharma through a Share Purchase Agreement, valued at INR 11,917 crores (INR 1,600 per share). This will be followed by a mandatory open offer to acquire up to 26% of JB Pharma shares from public shareholders at INR 1,639.18 per share. Additionally, Torrent has indicated its intent to purchase up to 2.80% of equity shares from certain JB Pharma employees at the same price as the KKR transaction.
A subsequent merger of Torrent and JB Pharma will be executed via a scheme of arrangement. Following the Board approvals, JB Pharma shareholders will receive 51 Torrent shares for every 100 JB Pharma shares held.

Samir Mehta, Executive Chairman of Torrent, expressed enthusiasm for the deal: “We are thrilled to welcome the JB Pharma legacy and leverage this platform for future growth. Torrent’s extensive footprint across India, combined with JB Pharma’s rapidly expanding domestic business, and their CDMO and international reach, presents a formidable opportunity to amplify both revenue and profitability. This strategic alignment significantly advances our objective to bolster our presence in the Indian pharmaceutical market while building a more expansive global footprint. Furthermore, the CDMO segment offers a promising new avenue for long-term growth for Torrent.”

Gaurav Trehan, Co-Head of Asia Pacific and Head of Asia Pacific Private Equity at KKR, remarked: “JB Pharma’s remarkable transformation under KKR’s ownership underscores our capability to scale high-quality businesses. We are incredibly proud of our collaboration with JB Pharma’s management team, led by Nikhil Chopra, where we deployed KKR’s global experience and operational expertise to fuel both organic and inorganic growth, solidifying JB Pharma’s position as one of India’s fastest-growing branded pharmaceutical companies. We are confident in the company’s continued growth trajectory and extend our best wishes to the team as they embark on this new chapter with Torrent.”

Nikhil Chopra, Chief Executive Officer and Whole Time Director of JB Pharma, added: “Over the past five years, JB Pharma has achieved significant growth, becoming one of India’s fastest-expanding pharmaceutical entities, a success driven by KKR’s strategic guidance, the diligent stewardship of our independent directors, and the focused execution by the management team. We have established a robust foundation for sustained market-leading growth and consistent profitability improvement. As we transition to this new phase with Torrent Pharmaceuticals, we are confident that the combined strengths of our organizations will unlock substantial opportunities to enhance healthcare access across our markets.”

Strategic Rationale Highlights:

The acquisition grants access to a high-growth Indian business with leading brands in chronic therapeutic areas and entry into promising segments like ophthalmology.
It is expected to significantly strengthen Torrent’s market share within the Indian Pharmaceutical Market (IPM).
The integration is anticipated to yield substantial operational synergies across various business functions.
This move diversifies Torrent’s business by establishing a presence in the CDMO segment, poised for long-term growth.
The combined entity will benefit from enhanced market consolidation in key international territories and a greater capacity for scaling operations.

Transaction Structure & Approvals:

Torrent’s acquisition of a 46.39% stake (on a fully diluted basis) via an SPA, along with potential acquisition of an additional 2.80%, totaling 49.19%, will trigger a mandatory open offer for 26.0% of shares, in accordance with SEBI (SAST) Regulations. This will be followed by the merger through a Scheme of Arrangement.
Both the SPA and the Scheme are subject to the necessary statutory and regulatory approvals from bodies including the Securities and Exchange Board of India (SEBI), Stock Exchanges, the Competition Commission of India (CCI), and the National Company Law Tribunal (NCLT), among others.

Advisors:
Moelis & Company and NovaOne served as financial advisors to Torrent, with Khaitan & Co. providing legal counsel. Ernst and Young Merchant Banking Services LLP and BDO Valuation Advisory LLP acted as independent registered valuers for Torrent and JB Pharma, respectively. KKR’s financial advisory was provided by Kotak Investment Banking and Rothschild & Co, with Shardul Amarchand Mangaldas & Co acting as legal counsel. Goldman Sachs (India) Securities Pvt. Ltd. advised JB Pharma on financial matters, and AZB & Partners provided legal counsel to the JB Pharma Board of Directors. Axis Capital Limited and ICICI Securities Limited provided fairness opinions on the share exchange ratio to the Boards of Torrent and JB Pharma, respectively.

About Torrent Pharma:
Torrent Pharma is a prominent player in the Indian pharmaceutical industry, with a strategic focus on chronic and sub-chronic therapeutic segments. The company has cultivated a reputation for developing niche pharmaceutical solutions driven by patient-centric innovation. Its global presence extends across Brazil, Germany, and the United States.

About JB Pharma:
J.B. Pharma is recognized as one of India’s fastest-growing pharmaceutical companies and a leader in the hypertension segment. While its primary revenue source is its strong domestic Indian market presence, it also holds significant positions in Russia and South Africa. In India, six of its brands are ranked within the top 300 IPM brands. The company exports its finished formulations to over 40 countries, including the USA, and is a leading CDMO in the medicated lozenges category. It operates eight state-of-the-art manufacturing facilities in India, including a dedicated facility for lozenges, all certified by leading international regulatory bodies.

About KKR:
KKR is a leading global investment firm renowned for its alternative asset management, capital markets, and insurance solutions. The firm is committed to generating attractive investment returns through a disciplined approach, leveraging world-class talent, and fostering growth within its portfolio companies and the communities they serve. KKR sponsors investment funds spanning private equity, credit, and real assets, and collaborates with strategic partners to manage hedge funds. Its insurance subsidiaries, managed by Global Atlantic Financial Group, offer retirement, life, and reinsurance products. References to KKR’s investments may encompass the activities of its sponsored funds and insurance subsidiaries. Further information about KKR & Co. Inc. (NYSE: KKR) can be found at www.kkr.com, and about Global Atlantic Financial Group at www.globalatlantic.com.

Torrent Pharma Seals Deal for Controlling Stake in J. B. Chemicals from KKR