Cinven makes second pharma play with new fund

The London-headquartered firm has funded the acquisition of Amdipharm with capital from its fifth fund, which has now reached €4bn as it pursues a €5bn target.

Cinven, a European private equity firm, has broadened its presence in the pharmaceutical sector by acquiring Amdipharm for £367 million (€455 million; $589 million).

The company will initially operate as an independent business, but Cinven plans to merge it with another pharmaceutical business, called Mercury Pharma, it said in a statement. Cinven bought Mercury Pharma in August for £465 million.

Cinven has acquired Amdipharm using its fifth fund, which is still in fundraising. The deal is the fourth to be made using capital from the fund, which has a €5 billion target and held its first close in March when it reached €3 billion. Cinven declined to comment on fundraising.

A source familiar with the matter told Private Equity International Cinven has managed to garner €4 billion in commitments so far.

Cinven has a long and successful track record in the healthcare and pharmaceutical sector. It is understood that in total, Cinven has realised a 3.2x return on its realised healthcare investments.

Both Amdipharm and Mercury Pharma focus on niche pharmaceutical products, both branded and unbranded. The businesses complement each other very well, the firm said. Mercury’s customer base is largely UK-focused, whereas Amdipharm has a significantly greater international presence, the statement said. The founders of Amdipharm will retain a minority stake in the business. The company’s revenues are currently £110 million. 

“Our 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,” Suprai Rajagopalan, a partner at Cinven, said in the statement.

“The strength of the combined group will also enable us to pursue other potential international acquisitions. In addition, there are significant opportunities to cross sell products and 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,” John Beighton, chief executive of Mercury Pharma, said in the statement.

Jefferies acted as the sole financial adviser to Cinven. Jefferies also advised Hg Capital on the sale of Mercury Pharma to Cinven and was underwriter to Cinven's debt in that deal, the firm said.