Biocon Biologics may close $3.34 billion Viatris deal in Q1

Biocon Biologics said it could close a $3.34 billion transaction of the biosimilar business acquisition of Viatris earlier this quarter if it receives approval from regulatory agencies.

Biocon chairperson Kiran Mazumdar-Shaw told ET that equity and debt were the components to finance the deal. Mazumdar-Shaw said, “We’ve arranged it all.. There’s a huge interest, it’s a very unique story, people are excited.”

“We have said (closing of the transaction) in the second half (2022), if it can be done in the first quarter we will be very happy, .. with the regulators we do not know .. it is the regulatory agencies in India. Mazumdar-Shaw said, “It really has to accelerate.” In March, one of the largest outbound acquisitions by an Indian pharmaceutical company, Biocon Biologics (BBL) to acquire Viatris’ biosimilar assets for $3.34 billion Signed a definitive agreement.BBL will pay Viatris $2 billion in cash at the conclusion of the deal and $335 million in 2024.

Of the $2 billion, $800 million will come through equity investments from existing investors, including parent Biocon and others such as Serum Institute of India, Abu Dhabi-based ADQ. True North, Tata Capital Growth Fund and Goldman Sachs. BBL will also issue $1 billion compulsorily convertible preference shares, which when converted will amount to at least a 12.9% stake in the company at a valuation of $8 billion.

As part of the deal, BBL will get Viatris’ global commercial infrastructure in developed and emerging markets. Vytris’ global biosimilar business has projected revenue of $875 million and EBITDA of $200 million for calendar year 2022, which is projected to exceed $1 billion in revenue next year.

Adar Poonawalla, CEO of SII, which has made strategic investments in Biocon Biologics, told ET that their commitment to equities has been worked out. SII holds 15% stake in Biocon Biologics. “We have made a strategic investment, we can take a little more (in Biocon Biologics),” Poonawalla said.

“I cannot confirm how much and what will be announced in one-and-a-half months,” he said. ET last month quoted sources about Biocon Biologics as saying $1.2 billion through an offshore loan with the pharmaceutical company that has appointed HSBC, MUFG and Standard Chartered Bank to underwrite the proposed five-year overseas debt. Collect.

The loan is likely to be priced after adding about 220 basis points to the global rate benchmark Secured Overnight Financing Rate (SOFR), the report said.

Originally published at Pen 18