CVC Credit, through its third European direct lending fund, has financed TPG in its acquisition of control of DOC Generici, a leading producer of generic drugs in Italy, following the signing of binding agreements last Summer with seller funds ICG and Mérieux Equity Partners (see here a previous article by BeBeez). This was announced by the private credit arm of alternative asset giant CVC in late November (see the press release here), but the news had so far never been made public in Italy.
The size of the financing has not been disclosed, but recall that the buyout was conducted, it is said, based on a enterprise value of around €1.6 billion for the group, which closed its 2021 financial statements with €244.6 million in revenues, an ebitda of 103, 4 million and net cash of 53 million (see the Leanus report here, after registering for free), despite debt that includes a bond initially issued for 470 million by Diocle spa (parent company of Diocle BidCo, the vehicle with which ICG and Mérieux had bought DOC Generici). The bond, with a coupon of 3.875 percent and maturity June 30, 2026, has been listed on the ExtraMot Pro market since June 2019 (see here a previous article by BeBeez) and today has 322 million outstanding. Last March Moody’s raised the corporate and bond ratings to B1 from B2, after the last partial redemption in February (see Moody’s report here).
DOC Generici is an old acquaintance of CVC, as ICG and Mérieux Equity Partners had acquired their stake in 2019 from the group’s own private equity arm, CVC Capital Partners, on the basis of an enterprise value of €1.1 billion (see here a previous article by BeBeez), after the group closed 2018 with 208 million in revenues and an ebitda of €81 million. CVC in turn had bought control of the group from the British fund Charterhouse in March 2016 (see here a previous article by BeBeez). At that time DOC Generici had been valued at 650-680 million euros based on 2015 consolidated revenues of about 180 million and ebitda of 61 million. Charterhouse in turn had acquired control of DOC Generici in 2013 from Apotex, Chiesi Farmaceutici, and Zambon for a valuation at the time of 7-8 times ebitda, worth between 320 and 340 million, based on DOC Generici’s 2012 revenues of 131.8 million and ebitda of 43 million (see here a previous article by BeBeez).
Simone Zacchi, managing director of CVC Credit, commented, “DOC Generici is well-positioned with a strong brand operating strategy and a broad and diversified product portfolio, and we are excited to support TPG’s ambitions to further strengthen its leadership position in the growing Italian generic drug market.”
And Andrew Davies, partner and co-head of Private Credit at CVC Credit, added, “We are delighted that through our relationship with the sponsor, TPG has approached us to participate in this transaction. Our goal is always to partner with high-quality sponsors and successful companies with stable revenue streams and strong cashflow generation, and DOC Generici is an excellent example of this.”
DOC Generici’s is the second financing announced this year by CVC Credit related to an Italian company. Previously, again through European Direct Lending Fund III, CVC supported last October the buyout of leading Italian manufacturer of special ingredients for pastries Irca by Advent International (see here a previous article by BeBeez), while in November 2021 the fund had financed the buyout of sliding door manufacturer Scrigno taken over by PAI Partners (see here a previous article by BeBeez).
CVC’s European Direct Lending Fund III closed its fundraising in early December with €6.3 billion in commitments (see here a previous article by BeBeez). CVC Credit now manages total assets of more than 35 billion euros through its Performing Credit and Private Credit businesses. The latter includes the European Direct Lending and Capital Solutions strategies, with assets of more than 10 billion euros. At the end of June 2022, CVC as a whole managed €133 billion in assets distributed across private equity and secondary strategies in addition to credit.
