Sequent Scientific merger

Sequent Scientific and Viyash Life Sciences Merge: A Game-Changing ₹8,000-Crore Deal in the Animal Health Sector

In a landmark move for the pharmaceutical industry, Sequent Scientific Ltd, a leader in the animal health business, saw its shares skyrocket by over 12% on September 27 following the announcement of an ₹8,000-crore merger with Viyash Life Sciences. This strategic merger is poised to create a global leader in the animal pharmaceuticals market, backed by an expansive R&D and manufacturing platform.

Why This Merger Matters: A Unique End-to-End Platform

The merger comes with a swap ratio that allows Viyash shareholders to receive 56 Sequent equity shares for every 100 Viyash equity shares they hold. Once the merger is finalized, Sequent Scientific will emerge as the surviving listed entity.

According to the companies’ investor presentation, the rationale behind this merger is to build a “unique, differentiated, global end-to-end integrated platform” with a strong presence in animal health pharmaceuticals. Sequent Scientific merger, The merger is expected to significantly boost both companies’ operating capabilities, supported by a strong R&D backbone.

What Viyash Brings to the Table: Global Manufacturing Powerhouse

Viyash Life Sciences operates 10 manufacturing plants, including one in New Jersey, US. The company is renowned for producing active pharmaceutical ingredients (APIs) and drug formulations for the human health sector. This expertise complements Sequent’s specialization in animal health, creating a well-rounded entity with a broad spectrum of capabilities.

Share Market Surge Following the Announcement

Following the announcement, Sequent Scientific’s shares jumped by over 12%, reaching ₹214.2 per share by 11:25 AM on September 27. The market’s positive reaction reflects investor confidence in the merger’s potential to drive growth and innovation.

Turbocharging Growth: A New Era for Sequent Scientific

The merger will create an integrated business with a 5x increase in manufacturing capacity and a 6x larger R&D team. The combined entity will have 9x more USFDA-approved facilities and 8x higher potential for new product filings. This will allow the company to “turbocharge growth engines” and solidify its market leadership in animal health, while also capturing growth in the broader global pharmaceutical market.

For the fiscal year 2024 (FY24), Sequent Scientific posted revenues of around ₹1,400 crore with an EBITDA of ₹100 crore. The company currently operates seven manufacturing facilities across India, Spain, Brazil, and Turkey. With the merger, the combined entity will have 16 manufacturing plants, 10 of which are USFDA-approved.

Leadership Speaks: A Transformative Step Forward

Sequent Scientific’s CEO, Rajaram Narayanan, hailed the merger as a “transformative step” towards creating a global leader in animal health. He emphasized that this merger would significantly enhance Sequent’s research and development capabilities, enabling the company to scale its product development and capture new market opportunities.

“We believe that to continue delivering differentiated value to our customers, we must strengthen our R&D capabilities and solidify our leadership in the animal health market,” Narayanan added.

On the other hand, Haribabu Bodepudi, Viyash’s founder and former COO of global drug giant Mylan (now known as Viatris), praised the combination, stating, “This merger brings together two complementary businesses with a shared commitment to innovation, operational excellence, and delivering world-class solutions.”

Financial Overview: Valuation and Growth Potential

At the close of trading on Thursday, the combined entity’s value is projected to reach approximately ₹8,192 crore, reflecting the expansion in the company’s capital base. The deal’s financial advisor, JM Financial, played a crucial role in structuring the merger to maximize value for both companies.

As part of the existing partnership, Viyash Life Sciences is already a qualified supplier of intermediates to Sequent, especially for one of the largest APIs manufactured by Sequent for the US market.

What’s Next: Scaling Up for a Global Impact

The merger will bolster Sequent’s position in the global animal health market, providing a substantial increase in production capacity, R&D scale, and regulatory approvals. The combined capabilities of Sequent and Viyash will help drive innovation, create more efficient supply chains, and deliver high-quality pharmaceutical products to global markets.