Home-grown private equity firm Ascent Capital will swap its stake in Alivira Animal Health Ltd with its public-listed parent, Bangalore-based pharmaceutical company SeQuent Scientific Ltd, a move which would create an easy window to exit from the venture in the future.
SeQuent Scientific has received its board's approval to buy stake held by minority shareholders in Mumbai-based Alivira through an all-stock deal worth Rs 239.8 crore ($37.8 million), according to a stock market disclosure.
It will buy 9,997,941 equity shares of Alivira owned by Ascent Capital and an enterprise jointly owned by the promoters of Shasun Pharmaceuticals and SeQuent Scientific. It will then issue 3,585,413 shares of Rs 669.10 each to the minority shareholders through a preferential allotment.
Post this, Alivira will become a wholly-owned subsidiary of SeQuent Scientific.
It is not clear how much stake will Ascent Capital get in SeQuent Scientific but the overall dilution is expected to be just under 10 per cent of the capital base of the firm.
Alivira, formed as a joint venture between integrated pharma player SeQuent Scientific and Chennai-based Shasun Pharmaceuticals Ltd, develops, manufactures and sells veterinary products, including active pharmaceutical ingredients (API) and formulations in the global market. Last year, private equity firm Ascent Capital had picked up minority stake in Alivira for an undisclosed amount.
Later Shasun exited the venture as part of a deal where it is being acquired by Strides Arcolab.
SeQuent is one of the world's largest producers of anthelmintics, a drug used in treating infections caused by parasitic worms, and a stronger player in the veterinary API business. Founded in 1985, the firm has restructured its business in the past through various divestments.
In April, it raised Rs 52.25 crore from Academician and value investor Shivanand Mankekar and his son Kedar.
SeQuent's scrip was trading at Rs 779 each, up 3.59 per cent on BSE in a weak Mumbai market on Thursday at 3.07 PM.