Igor Rudinsky, founder and sole shareholder of SIA International, Russia’s largest pharmaceutical distributor, has agreed to sell a 50 per cent stake in the firm to private equity house TP
Igor Rudinsky, founder and sole shareholder of SIA International, Russia’s largest pharmaceutical distributor, has agreed to sell a 50 per cent stake in the firm to private equity house TPG Capital for some USD800m.
The transaction, Russia’s largest private equity investment to date, is funded entirely through equity and is subject to customary closing conditions and regulatory approval. TPG Capital was represented in the deal by its long-time legal counsel Cleary Gottlieb.
Under the agreement, part of the purchase price will finance the working capital needs of the business going forward as well as to fund investment to improve logistical infrastructure and systems. The newly formed board of directors will consist of eight members, with four appointed by each party to the deal and Rudinsky remaining chief executive and chairman.
The size of the Russian pharmaceuticals market was approximately USD12.4bn in 2007, following 16 per cent year-on-year growth. SIA supplies pharmaceuticals to more than 30,000 Russian pharmacies and hospitals through its network of 41 regional subsidiaries across the country’s 12 time zones. Almost a quarter of pharmaceuticals in Russia are distributed through SIA, which posted revenues last year of USD2.7bn.
‘TPG Capital makes an ideal partner for SIA, given its deep industry experience and focus on long-term growth,’ Rudinsky says. ‘We are excited by the opportunity to work with TPG and, through improved access to capital, to continue the success and growth we have achieved over the past 15 years.’
Stephen Peel, a TPG partner and head of the firm’s Eurasia business, says: ‘SIA is a market leader in one of the world’s fastest growing pharmaceuticals markets. Igor Rudinsky and his management team have built an impressive and highly effective business. The combination of TPG’s capital, global experience and resources should help take the company to the next stage in its development.’
SIA International was set up by Rudinsky in 1993 and distributes more than 10,000 products from 350 Russian and 150 foreign manufacturers to pharmacies and hospitals. The firm, which has 15,500 employees, also owns four pharmaceutical production plants.
TPG Capital is the global buyout business of TPG, a private investment firm founded as Texas Pacific Group in 1992 and which now has more than USD50bn of assets under management and offices in San Francisco, London, Hong Kong, New York, Moscow, Mumbai, Beijing, Shanghai, Singapore, Tokyo and Melbourne.
TPG Capital invests in a range of industries, including healthcare (Axcan Pharma, Biomet, Fenwal, IASIS Healthcare, Oxford Health Plans, Parkway Holdings, Quintiles Transnational, Surgical Care Affiliates), retail (Debenhams, J. Crew, Myer, Neiman Marcus, Petco, Tomy), consumer (Beringer Wines, Burger King, Mey Icki), travel and entertainment (America West, Continental, Harrah’s, Hotwire, Midwest Air, Sabre), media and communications (Alltel, Avaya, Findexa, Hanaro Telecom, MGM, TIM Hellas, Univision), industrials (British Vita, Energy Future Holdings – formerly TXU, Graphic Packaging, Grohe, Kraton, Texas Genco), technology (Freescale, Lenovo, MEMC, ON Semiconductor, Seagate, SunGard) and financial services (Ariel Reinsurance, Fidelity National Information Services, NIS Group, LPL Financial Services, Shenzhen Development Bank, Taishin Holdings).
