Viyash Scientific (512529) M&A announcement summary

Deal rationale and strategic fit

• Merger creates a differentiated global platform in animal health and human APIs, leveraging both companies' strengths in R&D, manufacturing, and global reach, with access to over 150 countries and 16 manufacturing plants, including 10 US FDA-approved facilities.

• Strategic fit includes Sequent's animal health focus and Viyash's human API expertise, enabling cross-segment synergies and supporting SeQuent 3.0 strategy to consolidate fragmented industry players.

• Viyash brings strong IP with over 175 patents filed and 30+ granted, and deep backward integration for key products.

• Both companies share a promoter, indicating long-term commitment to growth and operational excellence.

• Enhanced product development, supply chain, and financial strength are expected to accelerate growth and market leadership.

Financial terms and conditions

• Shareholders of Viyash will receive 56 Sequent shares for every 100 Viyash shares; warrant holders receive 56 warrants for every 100 held; Sequent remains the listed entity.

• Swap ratios determined by KPMG and PwC, with fairness opinion from ICICI Securities; extensive due diligence conducted.

• Valuation is at a 44% discount to Sequent's current trading multiples, considered value-accretive.

• No cash consideration for the merger of Viyash subsidiaries with Viyash or Sequent Research Limited with the listed entity.

• Post-merger, promoter and promoter group shareholding increases to 62.4%, public shareholding decreases to 37.5%.

Synergies and expected cost savings

• Synergies include R&D support, manufacturing network optimization, procurement savings, and backward integration, with shared functions (Supply Chain, Finance, HR, IT) improving profitability.

• Procurement and raw material cost savings expected, with 100-200 basis points EBITDA improvement mid- to long-term.

• Enhanced R&D and new product pipeline, with Viyash's infrastructure capable of delivering 15 new products per year.

• Merger is margin accretive from day one and expected to de-leverage the balance sheet.

• Enhanced customer relationships and business development opportunities for both entities.