SeQuent Scientific, the Bangalore-based publicly held pharmaceutical company, is hiving off its veterinary formulation business as part of its strategy to drive focus on that business. This business contributes around 10% to the total revenues of Rs 350 crore. The company, jointly promoted by Arun Kumar, who is also the promoter of publicly held Strides Arcolab, is understood to be gearing for a strategic expansion plan. After Arun Kumar monetised the specialties business in Strides for a good $1.6 billion, he along with his partner - K R Ravishankar are understood to be working on driving the growth aggressively of SeQuent as well.
Investment bankers close to the promoters indicated that this step to hive off the veterinary formulation business is among the series of measures which the company is planning to drive value. This strategic move comes closely after it formed a LoI for a joint venture with Shasun Pharmaceuticals to form a Joint Venture Company (JVC) to develop, manufacture and sell veterinary products inclusive of both API (Active Pharmaceutical Ingredients) and formulations in the global market.
In terms of the arrangement proposed in the LOI, SeQuent and Shasun will set up a JVC, into which contributions will be made by both companies by way of transfer of identified assets, contracts and licenses. SeQuent will own 73% of the JVC and Shasun will own the remaining 27% ownership in
In addition to this business, SeQuent Scientific has good presence in the veterinary API business which contributes around 35% of the revenues, while another pharmaceutical business for humans also contributes a good chunk of the revenues. Besides this, SeQuent has presence in the specialty chemical business catering to the petrochemical business bringing in another 20% to the revenues.