CBPE triples its money with Rosemont pharma sale

The UK mid-market firm has sold Rosemont Pharmaceuticals to a US trade buyer for £180m – having more than doubled EBITDA during its period of ownership.

UK mid-market firm CBPE Capital has sold Rosemont Pharmaceuticals to US-listed pharma giant Perrigo. The US group said it paid £180 million for the business, but it is understood the price was actually closer to £183 million. According to CBPE, the exit generated a return of 3.25x on its original equity investment.

Rosemont specialises in making oral liquid medicines, which are taken by patients who have difficulty swallowing standard tablets (typically old people and small children).

CBPE bought the business in 2006 for £93 million, a deal that included an equity cheque of £52 million.

Partner Sean Dineen, who led the investment for CBPE, told Private Equity International that the firm identified two areas where it could make a “real difference” to Rosemont.

“First we invested in more R&D staff, which enhanced our ability to launch a greater number of new products. We also invested a significant £6 million in the manufacturing facility in Leeds, which streamlined production, but also increased capacity. That was key to growing the business.”

All told, CBPE helped the company to expand its offering from 58 products to 94, while headcount increased from 156 to 209. The net result was that EBITDA increased from £9 million in 2006 to £19.2 million in 2012.

Dineen said the business was now the clear market leader in its segment, and was already gearing up for international expansion.

CBPE Capital is currently investing from the £405 million Fund VIII, which it started raising in 2008 after spinning out of former parent Close Brothers. Rosemont was an investment from its previous vehicle, Fund VII.