Private equity investors at Cinven weren't kidding when they said they had big plans for their newly acquired Mercury Pharma. The firm has agreed to pay £367 million ($590 million) for family-owned drugmaker Amdipharm, with an eye to merging the two companies.
Cinven snapped up Mercury Pharma in August for £465 million ($746.3 million), saying the U.K. drugmaker could be a beachhead for expansion in the U.K. and internationally. Amdipharm speaks to both. Its drug portfolio comprises more than 50 off-patent, specialty products in more than 80 countries, including 28 products sold in the U.K. Together, the two companies would generate annual sales of more than £200 million ($321 million). Combined worth: £830 million ($1.3 billion), the Financial Times says.
Amdipharm also brings expertise in picking off older products that large drugmakers no longer want to market. That's how founders Vijay and Bhikhu Patel built the company, the FT says--by buying "unloved generics" from bigger pharma firms. The brothers will keep a minority stake in the combined business, Cinven says.
And that fits right into Cinven's strategy for Mercury Pharma. "We absolutely want to buy more products from the larger pharmaceutical companies that are looking to tidy up their portfolios," Partner Supraj Rajagopalan told Reuters. "I certainly could see an end business which is more than twice the size of what it is today."