KKR to buy 54% controlling stake in JB Chemicals and Pharmaceuticals; open offer to be launched

Further, KKR will launch an open offer to acquire an additional 26% stake in the company or 2.09 crore full paid-up equity shares.

Global investment firm KKR will buy a 54% equity stake in JB Chemicals and Pharmaceuticals, a Mumbai based pharmaceutical major for Rs 3,109 crore. KKR will make the investment through its subsidiaries, Tau Investments Holdings Pte. Ltd., Tau Holdco Pte. Ltd., and KKR Asia III Fund Investments Pte. The deal will see KKR acquire  4.17 crore fully paid-up equity shares of the face value of Rs. 2 for a price of Rs 745 per share, a premium of 4% from the closing price of the stock on the BSE at the end of Thursday’s trading session.

Further, KKR will launch an open offer to acquire an additional 26% stake in the company or 2.09 crore full paid-up equity shares. The open offer will also be made at a price of Rs 745 per share, said JB Chemicals and Pharmaceuticals in a statement to the stock exchanges on Thursday If successful the open offer will add another Rs 1,496 crore to the deal, taking the total value of the deal to Rs 4,605 crore. 

“We are thrilled that KKR – with its deep knowledge of the pharmaceutical industry and experience in investing in the sector, as well as its extensive investments in India – will take our mission forward and build on the foundation of core values that our family has instilled in this company. This will also create growth opportunities for our people to progress,” said J.B. Mody, Founder, Chairman, and Managing Director of J.B. Chemicals. JB Chemicals has an international presence with exports to over 40 countries. The pharma major earns half of its revenue from international markets. 

Post the transaction, the promoter group will be left with 17.01% of the voting share capital. Shares of JB Chemicals have surged over 65% since the beginning of the year. The pandemic and its effect on the stock market was easy on the pharmaceutical industry, helping JB Chemicals’ share price to stay in the green. 

“KKR has a long track record of supporting companies in the pharmaceutical and healthcare sectors globally. In India, KKR’s pharmaceutical and healthcare investments include Max Healthcare and Radiant Life Care, which collectively comprise the largest hospital network in North India,” the company said in a statement. Earlier, in May KKR, invested Rs 11,367 crore in Mukesh Ambani’s Jio Platforms for a 2.32% equity stake.