PAI in €725m deal to acquire Ethypharm from Astorg

Alice Tchernookova
10 May 2016

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PAI Partners is set to acquire French drugmaker Ethypharm from fellow private equity firm Astorg Partners in a deal reportedly valued at €725m.

PAI will acquire the Ethypharm alongside the firm's management team. The equity for the transaction will be provided by PAI Europe VI - PAI's latest €3.3bn fund, closed in July 2015 above its €2.5bn target.

The deal reportedly valued Ethypharm at 11x its 2015 EBITDA of €66m. PAI saw off competing bids made by private equity rival Bain Capital and European pharmaceutical firm Mundipharma, Reuters reported.

PAI's support should facilitate Ethypharm's plans for international expansion and further development as a speciality pharmaceutical company.

PAI's offer is subject to the consultation process of the relevant employee works councils. All parties will enter into final negotiations upon successful completion of this process.

Previous funding
Astorg had acquired a 60% stake in the company in 2007 via its fourth buyout fund, the €800m Astorg IV vehicle.

According to unquote" data, the deal was valued in the £100-250m range, with CEO Gerard Leduc and the management team retaining a 29% interest in the company, and Intermediate Capital Group (ICG) and other investors holding the remainder of the equity.

In 2013, GE Capital and Ares Management provided Ethypharm with a €170m unitranche facility. GE and Ares arranged the facility via their $1.75bn European Senior Secured Loan Programme unitranche joint venture. It refinanced Ethypharm's existing debt and was earmarked to fund both R&D and future acquisitions.

Company
Based in Saint-Cloud, near Paris, Ethypharm specialises in pain and addiction treatment. It operates in 30 countries worldwide, having recently expanded into the UK with the acquisition of pharmaceuticals provider DB Ashbourne.

The company also provides generic drugs to treat stomach and intestinal problems, as well as cardiovascular diseases.

It currently employs around 830 people and has a network of 80 partners worldwide, and currently generates revenues in excess of €200m.

People
Astorg Partners – Thierry Timsit (managing partner).
PAI Partners – Frederic Stevenin, Stefano Drago (partners).

Adviser
Equity – Willkie Farr & Gallagher (legal).
Vendor – ADL, Francois Deneux, Julien Vialade (commercial due diligence); KPMG, Axel Rebaudieres, Sophie Bougerolle (financial due diligence); Fidal, Patrick Seroin (tax); Taj, Jerome Gertler (legal); Weil Gotshal & Manges, David Aknin (legal); Rothschild Coporate Finance, Julian Hudson, Cyrille Harfouche (M&A).