Cvc Capital Partners pursuits a European generic pharma platform starting from Italy’s DOC Generici acquisition announced ten days ago for a 650 million euros enterprise value (see here a previous post by BeBeez), MF Milano Finanza iwrote last Saturday March 19th. DOC Generici is the largest independent generic pharmaceutical company in Italy, with a market share of over 15%
DOC Generici would be part of a European project for consolidating the generic pharamceutical sector. The project however is to be implemented in the medium term and as for now CVC is going to support DOC Generici business as stand alone.
CVC, led in Italy by partner Giampiero Mazza, already owns a stake in Alvogen, together with Singapore’s soverein wealth fund Temasek. The two funds bought their stake from Pamplona private equity fund last June and Alvogen was valued about 2 billion dollars (see here a previous post by BeBeez).
DOC Generici’s strategic plan, which has been agreed with the management (top management will reinvest in the company for about 5-10% of the capital) sees the enlargement of the product range to ophtalmology and nutritional additives on one side and brand empowerment on the other side, as the company wants to grow the stake of its revenues coming from drugs which are not completely refunded by the national healthcare system.
More in detail, the deal has been conducted through an Italian newco (Debussy spa) which ic controlled by an Italian newco (Debussy Investimenti) which in turn in controlled by Debussy sarl (Luxembourg) owned by CVC funds. In the coming days the structure of the financing package is going to be finalized. For the moment the whole financing has been subscribed by Unicredit which proposed 300 million euros in senior debt and 75 million in second lien both maturing in 7-8 years. Unicredit will proceed then to a syndacation to other banks, with Hsbc among them.
Doc Generici reached about 180 million euros in revenues and 61 millions in ebitda in 2015. Charterhouse who sold the company to CVC, had invested in DOC Generici in 2013 when the group was valued in a range of 320-340 million euros or 7-8x FY 2012 ebitda, which had been 43-44 millions after the group had reached 131.8 millions in revenues that year.