Advent International, a global buy-out firm, has completed the acquisition of LaborMed Pharma from its founders.
Advent International, a global buy-out firm, has completed the acquisition of LaborMed Pharma from its founders. LaborMed, based in Bucharest, manufactures and distributes generic pharmaceuticals, primarily for cardiovascular and central nervous system ailments.
The company recently launched a portfolio of drugs for diabetes. LaborMed also has its own distribution arm, through which it sells direct to over 80 per cent of the country’s pharmacies and wholesalers – a particular strength.
The company was founded in 1991 and has built a good reputation, based largely on the quality of its R&D. Its facilities and laboratories are state-of-the-art and EU-compliant, supported by eight warehouses throughout Romania, providing easy access to local pharmacies as well as nationwide.
The company is profitable on anticipated turnover, to year end 2007, of some EUR2m and employs approximately 500 people, mostly in development, manufacturing, sales and distribution.
Advent, which acquired Terapia in 2003 and supported its transformation from a local generics producer into a regional leader, until its acquisition in 2006 by Ranbaxy, believes LaborMed offers potential for similar growth.
The company is currently no 6 in the Romanian market, with a number of existing products yet to achieve their sales potential, a relatively small pipeline of new products and an under-used but excellent distribution platform.
Romania’s pharmaceuticals market remains relatively under-developed, with 2006 annual spend of EUR72 per head compared to a western European average of EUR423.
Advent is bringing in a new senior management team to the company to replace the retiring founders and managers. The team, all of whom worked with Advent at Terapia and who are co-investing in LaborMed alongside Advent, comprises chief executive, Stephen Stead, Adi Stroilescu business development, and Mircea Ilie as chief financial officer.
Stephen Stead has recently left his position as chief executive of Poland’s largest independent manufacturer, Polpharma, in order to lead the buy in team at LaborMed.
Commenting on the acquisition, Emma Popa-Radu, head of Advent’s Bucharest office, says: ‘We have been looking for another pharmaceuticals business in the region for some time and are delighted to have completed this buy-in in a market with few quality assets now available.’
Advent and the buy-in team intend to build LaborMed through organic growth and through the acquisition of companies with specialist, complementary drug portfolios, as part of the industry’s consolidation. The finance and marketing functions will be strengthened.
The Advent team on the deal was Emma Popa-Radu and Sebastian Tcaciuc. Advisers to Advent were CMS Cameron McKenna (legal), Ernst & Young (financial and tax), Marsh (insurance) and WS Atkins (environmental). The vendors were advised by Raiffeisen Investment (M&A advisers) and Popovici Nitu & Asociatii (legal). Debt for the deal was supplied by Bank Austria Creditanstalt and Syntaxis Capital.
LaborMed has good, modern laboratories, manufacturing facilities and warehousing, all of which are key to our plans for developing the product portfolio, expanded manufacturing capacity and maximising the distribution business.’
Stephen Stead, LaborMed’s new CEO, added: ‘I am very pleased to return to Romania and work alongside the Advent team again. This is a great opportunity to both invest in and lead LaborMed, a high quality company which provides an excellent platform for future growth.’
Advent International has been investing in the pharmaceuticals sector for over 20 years. In addition to Labormed, selected investments include Fada Pharma S.A., Argentina’s leading manufacturer of generic pharmaceuticals acquired by Polygon Labs; Viatris, a branded pharmaceuticals business acquired by Meda; and Terapia, Romania’s largest independent generic pharmaceuticals manufacturer, acquired by Ranbaxy Laboratories Ltd. (Mumbai: RANBAXY).
Advent International was founded in 1984, one of the world’s leading global buy-out firms, with offices in 15 countries on four continents. A driving force in international private equity for more than two decades, Advent has built an global platform of over 100 investment professionals across Western and Central Europe, North America, Latin America and Asia.
The firm focuses on cross-border, strategic restructuring and growth opportunities in five core sectors, employing a highly active ownership approach to drive earnings improvements in portfolio companies. Since inception, Advent has raised USD12bn in private equity capital and completed more than 200 buy-out and private equity transactions valued at over USD35bn in 35 countries.
Advent International in 2006/2007 received the following awards for its work with and exit of Terapia: Emerging Market Deal of the Year- Buy-outs 2007; Large Exit of the Year- Unquote Central & Eastern Europe Private Equity Awards 2007; Emerging Europe Deal of the Year- EVCA/INSEAD/Real Deals Magazine 2006.
