25 March 2008, Bucharest - Advent International, a leading global buyout firm, has completed the acquisition of LaborMed Pharma from its founders. LaborMed, based in Bucharest, manufactures and distributes generic pharmaceuticals, primarily for cardiovascular and central nervous system ailments. The company recently launched a portfolio of drugs for diabetes. LaborMed also has its own distribution arm, through which it sells direct to over 80% of the country’s pharmacies and wholesalers - a particular strength.
The company was founded in 1991 and has built a good reputation, based largely on the quality of its R&D. Its facilities and laboratories are state-of-the-art and EU-compliant, supported by eight warehouses throughout Romania, providing easy access to local pharmacies as well as nationwide visibility. The company is profitable on anticipated turnover, to year end 2007, of some €29 million and employs approximately 500 people, mostly in development, manufacturing, sales and distribution.
Advent, which acquired Terapia in 2003 and supported its transformation from a local generics producer into a regional leader, until its acquisition in 2006 by Ranbaxy, believes LaborMed offers potential for similar growth. The company is currently no. 6 in the Romanian market, with a number of existing products yet to achieve their sales potential, a relatively small pipeline of new products and an under-utilised but excellent distribution platform. Romania’s pharmaceuticals market remains relatively under-developed, with 2006 annual spend of €72 per head compared to a western European average of €423.
Advent is bringing in a new senior management team to the company to replace the retiring founders and managers. The team, all of whom worked with Advent at Terapia and who are co-investing in LaborMed alongside Advent, comprises Stephen Stead CEO, Adi Stroilescu Business Development and Mircea Ilie CFO. Stephen Stead has recently left his position as CEO of Poland’s largest independent manufacturer, Polpharma, in order to lead the buy in team at LaborMed.
Advent and the buy-in team intend to build LaborMed through organic growth and through the acquisition of companies with specialist, complementary drug portfolios, as part of the industry’s consolidation. The finance and marketing functions will be strengthened.
Commenting on the acquisition, Emma Popa-Radu, Head of Advent’s Bucharest office, says: “We have been looking for another pharmaceuticals business in the region for some time and are delighted to have completed this buy-in in a market with few quality assets now available. LaborMed has good, modern laboratories, manufacturing facilities and warehousing, all of which are key to our plans for developing the product portfolio, expanded manufacturing capacity and maximising the distribution business.”
Stephen Stead, LaborMed’s new CEO, added: “I am very pleased to return to Romania and work alongside the Advent team again. This is a great opportunity to both invest in and lead LaborMed, a high quality company which provides an excellent platform for future growth.”
Advent International has been investing in the pharmaceuticals sector for over 20 years. In addition to Labormed, selected investments include Fada Pharma S.A., Argentina’s leading manufacturer of generic pharmaceuticals acquired by Polygon Labs; Viatris, a branded pharmaceuticals business acquired by Meda; and Terapia, Romania's largest independent generic pharmaceuticals manufacturer, acquired by Ranbaxy Laboratories Ltd. (Mumbai: RANBAXY).
The Advent team on the deal was Emma Popa-Radu and Sebastian Tcaciuc. Advisers to Advent were CMS Cameron McKenna (legal), Ernst & Young (financial and tax), Marsh (insurance) and WS Atkins (environmental). The vendors were advised by Raiffeisen Investment (M&A advisors) and Popovici Nitu & Asociatii (legal). Debt for the deal was supplied by Bank Austria Creditanstalt and Syntaxis Capital.