Cohance Lifesciences Ltd. announces an acquisition

The USD 18M is entirely equity-funded from internal accruals, not debt. The mix is:

The split is approximately 72.22% NJ Bio and 27.78% Aruka Bio, derived from USD 13M and USD 5M respectively ^[1].

Effect on standalone liquidity and leverage

The latest standalone financial data reports:

• Cash and equivalents: Rs 13.11 Crores ^[3]
• Total debt: Rs 95.24 Crores ^[4]
• Net debt: Rs 82.13 Crores ^[5]
• Total equity: Rs 4,480.10 Crores ^[6]
• Reported standalone debt-to-equity: 0.02x ^[7]

Because the transaction is proposed to be funded through internal accruals, the immediate mechanical effect—assuming the full amount is paid from cash and no other balance-sheet changes occur—is:

• Cash: falls by the INR equivalent of USD 18M. A precise post-transaction cash balance cannot be calculated without the applicable USD/INR conversion rate and confirmation of the actual payment date.
• Gross debt-to-equity: remains approximately 0.02x, because the disclosed funding does not add borrowings.
• Net debt: increases by the INR equivalent of USD 18M, from the reported Rs 82.13 Crores on a standalone basis. The implied pro-forma formula is: post-investment net debt = Rs 82.13 Crores + INR equivalent of USD 18M, assuming equity and debt are otherwise unchanged.

The important qualification is timing: completion was expected by the end of September 2026, subject to definitive agreements, approvals and closing conditions ^[2]. Therefore, the latest standalone cash and leverage figures are pre-transaction reported balances, not post-investment numbers. The investment should be treated as a liquidity outflow and an increase in net leverage, but not as an increase in gross debt-to-equity unless Cohance subsequently funds it through borrowings.

The USD 18 million is split between an incremental NJ Bio stake and control of Aruka Bio:

• NJ Bio — USD 13 million: Cohance’s common-equity ownership increases from 56.0% to 67.3%, implying an incremental 11.3 percentage-point stake. The transaction acquires the entire holdings of Ms. Priyashri Nayak and the Jain Family Irrevocable Trust; Dr. Jain retains 32.7%. The 11.3 pp figure is derived from the disclosed ownership change. ^[1]
• Aruka Bio — USD 5 million: Post-transaction ownership is 65% directly by Cohance, 25% by NJ Bio, and 10% by Dr. Jain. Thus, Cohance’s effective economic interest is 90% when its 25% indirect holding through NJ Bio is included, while its direct stake is 65%. The 90% is before further dilution from Dr. Jain’s performance-linked equity award. ^[2]

Valuation disclosure: The announcement does not provide a transaction enterprise value, equity value, EBITDA, revenue multiple, EV/EBITDA, or other valuation multiple for either NJ Bio or Aruka Bio. It discloses consideration and post-transaction ownership, but not the implied valuation denominator needed to calculate a benchmark multiple. ^{[1] [2]}

Accordingly, the deal cannot be benchmarked directly against Cohance’s existing CDMO segment valuations on an EV/EBITDA basis from this disclosure alone. In particular, the NJ Bio price implies a value for the incremental equity interest, but the company does not disclose the fully diluted share count, transaction equity value, debt/cash, or EBITDA needed to convert that consideration into a reliable EV/EBITDA multiple. Aruka Bio is also at the preclinical stage, making an EBITDA-based comparison potentially less meaningful even if valuation data were later disclosed. ^[1]

The transactions should broaden Cohance’s ADC offering from manufacturing-led execution to a more integrated payload-linker, bioconjugation and development-to-commercial-supply platform. However, the only confirmed date is transaction completion—not when these capabilities will begin contributing materially to the CDMO revenue mix.

How the capabilities augment Cohance’s ADC platform

• NJ Bio adds front-end technical and customer-facing capability. NJ Bio will remain focused on contract research, development and manufacturing services, with expertise in payload-linker chemistry and bioconjugation. Integrating this with Cohance’s manufacturing infrastructure is intended to support customers across the ADC lifecycle, from CRDMO development through commercial supply. ^[1]
• The integration improves service continuity. Rather than offering isolated ADC manufacturing steps, the combined platform is designed to link early-stage payload-linker and conjugation work with Cohance’s downstream manufacturing capabilities. This should improve cross-selling and reduce hand-offs for customers, although the announcement does not quantify expected orders, capacity or revenue synergies. ^[1]
• Aruka Bio adds proprietary asset and partnership optionality, not an immediate CDMO revenue stream. Cohance’s control of Aruka’s proprietary ADC platform is intended to support co-development, licensing and collaborations with pharmaceutical and biotechnology companies as the pipeline progresses. Aruka’s lead programme is still at the preclinical stage, so its nearer-term strategic value is platform access and potential partnering rather than confirmed commercial CDMO revenue. ^{[1] [2]}

Confirmed timeline

• Transaction closing: Both investments are expected to be completed by the end of September 2026, subject to definitive agreements, applicable approvals and customary closing conditions. ^[2]
• CDMO revenue contribution: No specific quarter, fiscal year, revenue amount or CDMO-mix percentage has been confirmed. Management describes the benefit only as strengthening performance “over time.” ^[2]

The key distinction is therefore between capability availability and revenue monetisation: NJ Bio’s closer integration could support customer-facing ADC service expansion after closing, while Aruka’s contribution is more development- and partnership-dependent. The September 2026 date should not be interpreted as the start date for a measurable ADC contribution to Cohance’s CDMO revenue mix.