Thread by @ValueEducator

#JBChemicals and Pharma: Acquisition from Sanzyme 💊

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1. They have acquired Sanzyme Private Limited’s key brands and related assets related to probiotics, therapeutic nutraceuticals and reproductive health for ~₹628 Cr.

This excludes related taxes and stamp duty. They expect to invest around ₹15 Cr separately as working capital for the acquired business.

2. The acquisition is funded through a mix of internal accruals and short term debt. The transaction is expected to complete in the next 2 weeks subject to customary closing formalities.

There will be no goodwill created as part of this transaction.

3. The brands acquired are for Indian markets only

4. Sanzyme is a leading player in the probiotic and hormone segments. It’s flagship brand Sporlac, launched in 1973 is one of the leading probiotic brands in the country.

Another brand Lobun is a multi-strain probiotic blend which is used to delay progression of CKD (Chronic Kidney Disease) and is one of the most trusted formulations prescribed by leading nephrologists across the country.

Sanzyme also has a comprehensive range of products across all phases of the female reproductive health cycle and the most common male reproductive issues.

5. Overall, these brands have a combined revenue of around ₹160 Cr. The acquisition expands the addressable opportunity of JBCPL by ₹6000 Cr across all the segments.

6. This will make them one of the top 5 players in the probiotic category which is growing at around 12-14% annually. The top 5 players along with enzymes account for 65% of the market. Sanzyme itself has a market share of 7.44%.

7. Key drivers in probiotics have been well recognized health benefits, expanding usage indications and superior safety profile of the products when used with other medications.

8. Sanzyme’s range covers both the mass probiotic market through Sporlac as well as specialty products like Lobun and Oxalo that addresses the unmet demand in the niche kidney care segment.

9. Reproductive health, another area that Sanzyme’s range of products focuses on, is also expected to see rapid growth based on the rapid increase in infertility cases in India.

10. The product acquired by them address both gynecological and sexological segment

11. Sanzume has a distribution network of over 100,000 healthcare professionals and over 300,000 pharmacies.

Currently, Sanzyme’s brands have major revenue contribution coming from the Southern and Northern part of the country.

12. Going forward, India’s contribution to JBCPL’s revenues is expected to exceed 50% of overall revenues.
Post this acquisition, JBCPL’s IPM ranking will move up 2 points.

13. There will be 350 sales and marketing personnel who will transition to JBCPL which will make it a fully integrated business, just like their other divisions.