Advent International scores biggest deal of the year

     Indian-based Ranbaxy has acquired Cluj-Napoca-based Terapia generic pharmaceutical producer for 324 million USD (267 million Euro).
     This is over six times the amount the US-based investment fund Advent International paid for the business and the investments it subsequently made.
     Advent had acquired 90.7 per cent of Terapia back in August 2003 for 44 million USD (approx 36 million Euro), via a public offering.
     “Subsequently we invested six million USD (approx five million Euro) up to the point in which our stake reached 96.7 per cent,” Advent International principal Emma Popa-Radu tells The Diplomat. “Now we have only one business in Romania that we have invested in – paint producer Dufa – but we are very much interested by the Romanian market and other transactions are in the making.”
     The principal added that the investment fund is looking at medium to large transactions, valued at between 15 and 20 million Euro, but will also look at larger deals should the opportunity arise.

Indian summer

     Commenting on the acquisition, Malvinder Mohan Singh, CEO & managing director of Ranbaxy Laboratories Limited said the purchase gives the firm proximity and access to high growth markets. “The transaction is compelling and furthers us on our path to becoming a top five global generic company,” he added.
     Joanna James, managing director central Europe at Advent International added: “With consolidation imminent in the pharmaceutical industry, scale and global presence will be critical. We believe Ranbaxy is best equipped to take the company forward into its next phase of growth.”
     Romania is the fastest growing pharmaceutical market in the central and eastern European (CEE) region with an annual growth of 34 per cent from 2002 to 2005, versus the growth of 24 per cent for the region.
Romania also has an increasing per capita expenditure on pharmaceuticals. This should provide head-room for a new player on the market to grow.
     Ranbaxy now gains access to Terapia’s product basket of 157 marketing authorisations.
     “Combining the two companies commercial operations will establish a market leading position in the domestic primary care market and a superb platform for the introduction of new products,” added Stephen Stead, CEO of Terapia. “Further investment into Terapia’s research & development capabilities and manufacturing facilities, will create a major regional hub for the Ranbaxy business.”
     Ranbaxy aims to provide Terapia with new products at lower costs, which should increase competition in the market.
     Almost one third of Terapia's product portfolio is registered in over 15 countries including Russia, Ukraine and Poland.

     Ranbaxy Laboratories Limited was advised by ABN Amro Corporate Finance, while Advent International was advised by Merrill Lynch International.

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