Suven to acquire controlling stake in Sapala Organics, a CDMO player

Suven has agreed to acquire an initial controlling stake, operate the business together with the selling shareholders for the next few years and eventually acquire 100 per cent of the shareholding in Sapala

Suven Pharmaceuticals has entered into a definitive agreement for a strategic controlling investment in Sapala Organics, subject to regulatory approvals and conditions. 

Sapala is a Hyderabad-based CDMO focused on Oligo drugs and nucleic acid building blocks including specialised/modified Amidites and Nucleosides, drug delivery compounds (including GalNAc), Pseudouridine, amongst others. The oligo & nucleic acid building blocks market is a ~$750 million market and is expected to grow at a robust ~20 per cent CAGR. Sapala’s customer base includes innovator Pharma, CDMOs, and diagnostic companies, and is a key partner in their oligo drug NCE programs.

Suven to acquire 67.5 per cent equity stake (i.e. 51 per cent of the share capital of Sapala on a fully diluted basis) for a consideration of Rs. 229.5 crore subject to customary working capital and net debt adjustments. The company will acquire the remaining equity stake a few months after FY2026-27, as per the terms of the definitive agreements. Upon consummation, the company will own 100 per cent of the share capital of Sapala on a fully diluted basis. The transaction is subject to customary closing conditions. Steadmount Capital Advisors and Banyan Advisory acted as advisors to Sapala.

Sapala had a revenue of over INR 670mn and adjusted EBITDA margins of 45 per cent+ for FY24. Suven has agreed to initially acquire a controlling stake whereas the existing shareholders of Sapala will continue to hold a significant minority stake for the next few years. Dr Reddy will continue to run the business as the CEO and also be associated with the Suven+Chance platform as a strategic advisor for the Japan market. Overall, 100 per cent acquisition is expected to be in the range of 13-15x EBITDA multiple and is linked to the next three years’ financial performance. 


CDMOmergers and acquisitionsSapala OrganicsSuven Pharmaceuticals
Comments (0)
Add Comment