SHS buys minority stake in Develco Pharma

Harriet Matthews
17 December 2020

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SHS has acquired a minority stake in Germany-based drug developer Develco Pharma.

The investment is intended to accelerate the company's development of new drugs, according to a statement. New products are likely to focus on new indications and therapeutic areas.

The deal came about via a proprietary connection, with an introduction taking place at the start of 2020, Manfred Ulmer-Weber, partner at SHS, told Unquote: "We were able to meet before the lockdown started and saw that it could be an interesting situation for both parties. Develco is well established and has a strong growth pipeline, and as a specialised healthcare investor, we were able to bring not just money but also value to the table."

Ulmer-Weber is to join Develco's board of directors following the transaction, according to a statement.

SHS is investing via its fifth fund, which held a final close in July 2019 on €130m and has now made nine investments. The vehicle generally deploys equity tickets of up to €30m, with the option to provide up to €60m alongside co-investors. The fund focuses on healthcare, medical technology and diagnostics businesses.

The fund aims to make 12-15 deals in total, Ulmer-Weber said, and he expects the vehicle will make around five more deals in 2021 and 2022: "We are looking for growth cases and buyouts; we still have some dry powder in our fund."

Company
Develco provides development, approval and production of innovative and generic pharmaceutical products. The company also has a modular system of formulation technologies to manufacture orally administered drugs. Develco's client base comprises pharmaceutical companies that sell products on a global scale.

Develco was founded in 2006 and employs 120 staff. It is headquartered in Schopfheim, Germany, and also has operations in Switzerland.

People
SHS – Hubertus Leonhardt (partner, managing director); Manfred Ulmer-Weber (partner).
Develco Pharma – Mathias Scheer (chairman of the board of directors); Martin Renner (CEO).