Cinven draws on new funds to buy latest pharma firm

Michael Bow
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CINVEN, the European private equity giant, yesterday announced it had bought UK pharmaceutical firm Amdipharm in a bespoke deal using cash raised for its new Cinven V flagship fund.

The £367m purchase of the family owned business follows on from the acquisition in August of another healthcare business, Mercury Pharma from HgCapital for £465m.

Cinven said it will merge the two businesses into a single entity within months, forming a new business that Cinven claims will double the revenue streams and profits of the combined group. The acquisition has been funded with money from its Cinven V fund. Though still in its fundraising phase, the fund – which is targeting €5bn – has raised around 80 per cent of its capital, or €4bn.

The purchase was undertaken as a proprietary deal by Cinven, unusual for private equity deals, which are often sold through a traditional bidding auction process.

It is the third bilateral deal completed by Cinven’s healthcare side since 2010.

Cinven partner Supraj Rajagopalan, a former NHS doctor, who led the purchase, said the fundraising challenges faced by some private equity houses meant more bi-lateral deals could come to market.

“Clearly it is more difficult to raise funds than it has been before,” he said. “However, this is making the market less competitive, which means if you are genuinely credible you can get access to good deal flow.”



Cinven was advised on the acquisition by Jefferies’ healthcare investment banking division. Heading up the team was Tommy Erdei, managing director in the healthcare division and Tariq Hussain, joint head of M&A investment banking in Europe. The Jefferies team previously advised HgCapital on the sale of Mercury Pharma to Cinven in August. It was also underwriter to Cinven's debt issue last month to help fund the purchase. Jefferies also worked as adviser to London-listed SkyePharma on its capital structure plans this year. The bank has one of the biggest healthcare divisions in the world, comprising 82 people globally including 15 based out of its European headquarters in London. The latest Cinven transaction is the 21st speciality pharma transaction advised on by Jefferies since January 2011. It is also the fifth speciality pharma European transaction announced over the last four months for the bank.