Private equity group Cinven is to acquire family-owned international niche pharmaceuticals business Amdipharm Group for £367 million.
Amdipharm was founded by Vijay and Bhikhu Patel in 2002, has made "18 significant acquisitions" and now sells 50 products in over 80 countries with products including antibiotics as well as drugs for nausea, skin disease and thyroid problems. It calls these therapies 'legacy products', off-patent drugs "which may no longer be a priority for research-based pharmaceutical companies" and annual sales are around the £110 million mark.
Amdipharm will operate initially as a standalone but will be merged with Mercury Pharma, which was acquired by Cinven last month from fellow private equity group HgCapital for £465 million. Mercury runs a similar operation and has sales of around £100 million, but its customer base is largely UK-focused, whereas Amdipharm has a significantly greater international business.
Supraj Rajagopalan, a partner at Cinven, said the acquisition of Amdipharm is "completely transformational. It not only doubles the size of the combined group in terms of revenue and profitability but, importantly, creates a truly global business". John Beighton, Mercury chief executive, claimed that "the strength of the combined group will also enable us to pursue other potential international acquisitions", noting that "there are significant opportunities to cross-sell products".
He added that "the niche pharmaceuticals sector remains highly attractive, given both its comparative insulation from patent expiry issues which affect the broader pharmaceutical industry, as well as its underlying demographic trends".
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