Rosemont Pharmaceuticals occupies an unusual niche: founded in 1967, it makes oral medicines for patients – mostly old people – who have trouble swallowing standard pills and capsules. In 2006, UK-based lower mid-market group CBPE Capital paid £93 million to buy the business from former owner Savient Pharmaceuticals.
The first key decision, according to Dinnen, was to remain focused on liquids, rather than branching out into other related areas (like creams, ointments and so on). “Our fundamental strategy was to develop a business that had a reputation for being best-in-class globally in oral liquid formulations. Another owner could have gone down a different route, but we wanted to remain pure-play liquids.”
As soon as it acquired Rosemount, CBPE gave the green-light to a plan – worked on but not executed under the previous ownership – to “materially upgrade” the company’s manufacturing facility in Leeds, and to expand and refurbish its warehouse.
New product development was a major focus. The new owners brought in a new R&D director – who had previously worked at Sinofi and Merck – and during their ownership, boosted the new product team from 10 people to 24.
Rosemont also made great strides in a related area: the licencing or regulatory side of its business, which involves taking products through an approval process (including biostudies) that ultimately gives the company the exclusive right to sell that product.
5. Bolstering second tier of management
“The chief executive and the finance director were very good; in fact they were part of the attraction of the deal,” says Dinnen. “John [Blythe, the CEO] had worked there for 40 years and knew more about liquids than anyone else.”
Blythe certainly has no complaints. “We got on very well with CBPE right from day one. The most important thing is that we believed they would allow us to manage the business ourselves on a day-to-day basis. PE houses always say that they’ll let management get on with it, and you’re always a bit unsure about whether that’ll be the case. But CBPE recognised that we knew what we were doing, and that we had the building blocks for a very strong business. That doesn’t mean we had carte blanche – we had to justify all our ideas. But if they were backed up by sound arguments, CBPE were always supportive and forthcoming.” n