Advent sells Romanian pharma for $324m

India’s Ranbaxy Laboratories, unsuccessful in its bid for 3i’s German pharma business betapharm in February, has paid $324m for Advent International-backed Terapia.

Global private equity firm Advent International has sold its 96.7 percent stake in Romanian pharmaceuticals manufacturer Terapia in a $324 million (€268 million) transaction to Haryana, India-based drugs maker Ranbaxy Laboratories.
Advent originally acquired a 90.7 percent stake in Terapia in August 2003 through a $49.5 million leveraged buyout. According to Joanna James, managing director Central Europe, Advent increased its stake through a public tender.

Indian pharmaceuticals firms are really on the acquisition trail in Europe for generics at the moment.

Joanna James, managing director Central Europe, Advent International

The original acquisition was made from Advent’s second Central European fund, Advent Central & Eastern Europe II (ACEE II), a 1998-vintage $150 million vehicle. The firm is currently investing from ACEE III, which closed on €330 million in April 2005.
James said the auction process, run by Merrill Lynch, saw interest from two trade buyers and two financial buyers at the final round stage.
A strong level of interest in the sector provided an incentive for the relatively quick turnaround, added James. “There has been a lot of consolidation in generics at the moment and a lot of interest from buyers, so it made sense to take advantage and make the sale,” she said.
Ranbaxy recently lost out on the purchase of German pharmaceutical company betapharm Arzneimittel. Back in February, Ranbaxy, France’s Sanofi-Aventis and Israel’s Teva Pharmaceuticals were pipped at the post by Indian drugs maker, Dr Reddy Pharmaceuticals, which acquired betapharm from private equity firm 3i for €480 million. “Indian pharmaceuticals firms are really on the acquisition trail in Europe for generics at the moment,” added James.
Established in 1993, Terapia manufactures and sells generic branded drugs, mainly in Romania, Russia, Ukraine and Poland. The company reported sales of $74.4 million in 2005.
According to Advent, Romania is the fastest growing pharmaceutical market in the Central & Eastern European region, with an approximate annual growth of 34 percent from 2002 to 2005.