KKR will acquire 54 per cent stake in JB Chemicals for nearly $500 million

The global investment major, KKR has announced to acquire nearly 54 per cent stake in Mumbai-based drug manufacturer JB Chemicals & Pharmaceuticals, for Rs 3,100 crore.
As part of the deal, KKR will acquire its stake from the founding Mody family at a purchase price of Rs 745 apiece and make an open offer for an additional 26 per cent of the company.


As per the BSE notification, KKR has agreed to acquire 41.7 million equity shares of JB Chemicals, representing 54 per cent, from the promoters of the company, said a company statement on Thursday.


This is the second KKR investment in India within the last two months. In the month of May, KKR invested Rs 11,367 crore ($1.5 billion) in Reliance Industries’ digital assets subsidiary Jio Platforms for a 2.32 per cent stake, making its largest investment in Asia till date.

After this transaction, an open offer is going to be made to accumulate 20.93 million fully paid-up equity shares of JB Chemicals, representing 26 per cent. The open offer is also being made for Rs 745 apiece, said the company statement.


However, KKR is not longing to buy more than 65 per cent stake of the company and will accordingly adjust the stake from the promoters depending on the success of the open offer, which would then translate to Rs 3,750 crore ($500 m) payout for the fund.

Earlier on June 15, KKR agreed to sign an agreement to acquire the company, outbidding fellow private equity rivals PAG, Bain Capital and Apax in a keenly contested bidding war.
Currently, JB has a market value of Rs 5,740 crore. The stock has jumped up to 60 per cent over the past three months in anticipation of a transaction.

The investment in the company will be made through Tau Investment Holdings Pte, Tau Holdco Pte, and KKR Asia III Fund Investments Pte and after the acquisition, the management under JB Mody, JB Chemicals’ chairman, and managing director will continue to run the company.


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