Astorg, Goldman Sachs to sell HRA Pharma for EUR 1.8bn

The proposed transaction is expected to close by the end of the first half of 2022, subject to the satisfaction of customary closing conditions, including regulatory approvals.

HRA will continue to operate independently under Perrigo's ownership and its CEO David Wright, and the management team will remain in place, according to a statement.

The vendors said that HRA has expanded geographically under their ownership, with direct operations launched in the US and China. It also built digital capabilities with online sales now representing 10% of its total sales, and broadened its product portfolio, enabling HRA to triple its sales between 2015 and 2021.

Perrigo said that HRA's net sales growth is expected to be in the mid-teen percentage range, with an adjusted operating margin near the 30% range.

Previous funding
Astorg and Goldman Sachs' private equity arm acquired HRA Pharma in 2016, in what was the maiden deal for Astorg's EUR 2bn sixth fund. The SBO saw Astorg and Goldman Sachs acquire HRA from minority shareholder The Riverside Company and the founders. Both the selling GP and the executives reinvested alongside the management team to retain a stake in the newco.

Speaking to Unquote at the time, a source familiar with the situation revealed that Astorg would control a 55% stake in HRA, while Goldman Sachs would have a significant minority holding. The company's enterprise value remained confidential, but the same source confirmed it fell within the EUR 300m-500m range.

The 2016 deal marked the end of a process that began during the summer of 2015. At the time, Astorg, which was familiar with HRA since 2014, approached the company's owner and chairperson André Ulmann. The executive was working to list the business and had already mandated bookrunners to prepare the process. Exclusive talks ensued between the GP and Ulmann, who was convinced to freeze the IPO plans and move towards an LBO due to volatility in the public markets.

During the negotiations, Astorg decided to bring in Goldman Sachs' private equity arm as a co-investing partner. The move was prompted by the deal's large size and the plans by HRA to expand in the US market.

The deal marked a partial exit for Riverside, a mid-market GP that controlled an estimated 26% stake in HRA since its investment in November 2011.

Company
HRA focuses on over-the-counter (OTC) healthcare products across areas including women's health and compromised skin, operating via brands including Ella, Compeed, and Mederma.

Created in 1996, HRA has a direct operational presence in 11 European countries and partnerships that have extended its products' availability to more than 90 countries worldwide.

Advisers
Vendors – Sawaya Partners (M&A); Goldman Sachs Investment Banking Division (M&A); Rothschild & Co (M&A); Latham & Watkins (legal).
Acquirer – Centerview Partners (M&A); Wachtell Lipton Rosen & Katz (legal); Darrois Villey Maillot Brochier (legal).

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