Cinven continues generics deal spree with Amdipharm buy

By Nick Taylor

Private equity firm Cinven has followed up its August takeover of Mercury Pharma by snapping up Amdipharm for £367 million ($589 million). The plan is to merge the two acquisitions, creating a new player in generics armed with a portfolio of 200 products and annual sales of £250 million ($400 million).

Cinven laid down a marker in August when it said the £465 million ($747 million) buy of Mercury Pharma from fellow private equity firm HgCapital was the first of several deals. Just two months later the second takeover has arrived. When Cinven acts on its plan to merge the firms, it will create a notable new generics player valued by the Financial Times at £830 million ($1.3 billion).

U.K.-based Amdipharm brings a portfolio of off-patent specialty products to the merger. Dubbed "little jewelry boxes" by Cinven partner Supraj Rajagopalan, the products are low-volume drugs now superseded by new treatments. The millionaire Indian brothers behind Amdipharm spotted potential in these inauspicious assets and began buying them from larger pharma companies in 2002.

Amdipharm now has more than 110 product lines and operates in 50 countries. By outsourcing production--in 2009 it inked a multiyear deal with CMO Aesica Pharmaceuticals--Amdipharm has quickly added manufacturing clout to support its expanding portfolio. Amdipharm now works with CMO plants across Europe, Latin America and Australasia to support its increasingly global activities.

Coupling this global network to U.K.-focused Mercury Pharma creates the opportunity to boost revenues through cross-selling. And the opportunities could expand further in the future, with Cinven viewing the merged company as a launchpad to bigger things. As Mercury Pharma CEO John Beighton noted, the combined firm will have the scale to "pursue other potential international acquisitions."

Cinven reportedly has the financial clout to back up the plan, with a source telling Reuters the private equity player has raised €4 billion ($5.2 billion) for European buyouts. Fundraising on its 5th buyout fund began last year, with Cinven seeking €5 billion ($6.5 billion) from investors.

- read the FT's take
- check out Reuters' funding news
- find out more in the Cinven press release

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