Ergon acquires PharmaZell from Auctus and Lead

Ergon intends to combine the company with its portfolio company Farmabios under a new holding company, ZellBios, to be based in Luxembourg. The investment was made from Ergon's second fund, which closed in 2006. The value of the deal has not been disclosed.

Wolfgang de Limburg, partner at Ergon, stated that PharmaZell fits well with its previous portfolio company Farmabios. While the companies specialise in different pharmaceutical niche areas, and will retain separate operations, they will be held under the same holding company and complement each other.

Debt
The acquisition including the refinancing of the existing debt was financed with a unitranche debt facility provided by Ares Capital Europe. Previous mezzanine provider EQT has exited the investment.

Previous funding
Auctus created newco PharmaZell in June 2006 after acquiring the pharmaceutical division of NYSE-listed Lubrizol Group. Management also took a significant stake in the company. The transaction, valued at around €20m, was supported by a senior debt package from BHF Bank.

Company
PharmaZell, founded in 1947 in Raubling, Germany, develops and produces active pharmaceutical ingredients. It operates production facilities in Raubling, Germany, and Chennai and Vizag, India. In 2010/11 the company recorded sales of €52.4m with an EBITDA of €8.9m.

People
Partner Wolfgang de Limburg, partner Emanuele Lembo, and principal Riccardo Collini worked on the deal for Ergon. Nicolas Himmelmann managed the deal on behalf of Auctus. Daniel Jennewein, partner, worked on the deal for Lead Equities.
Kai Gebauer and Jennifer Kröll represented Ares Capital Europe. The CEOs of Farmabios, Giorgio Oberrauch, and PharmaZell, Oliver Bolzern, will join the newco as managing directors.

Advisers
Equity – Leonardo & Co (M&A); Freshfields Bruckhaus Deringer (Legal); Gütt Olk Feldhaus (Legal); PricewaterhouseCoopers (Financial due diligence, tax); Electra Group for Structuring, Seer Pharma (Operational due diligence); Arthur D Little (Commercial due diligence); Marsh (Insurance due diligence); URS (Environmental due diligence).
Management – TransAct Advisory Services (M&A); P+P Pöllath + Partners (Legal); KPMG (Financial due diligence, tax).

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• Topics
• DACH
• Buyouts
• Healthcare
• Germany
• Ergon Capital Partners
• AUCTUS Management GmbH & Co KG
• EQT
• Lead Equities AG
• Secondary buyout