Case Study: Sanitas



Product pipeline

0 → 40
2003            2011

Main Facts


Industry Pharmaceuticals
Company Description Generic pharmaceutical manufacturer
Region CEE
Investment Date 2004
Amount Invested EUR 58.1 million
Status Exited
Realised Value EUR 123.9 million
Cash multiple 2.1x
IRR 21.3%



Key numbers


  • 9(2003)

  • 98.3(2011)


  • 1.1(2003)

  • 28.6(2011)


  • 100(2003)

  • 1575(2011)



Through the period of Invalda and CVCI ownership Sanitas progressed from a small Lithuanian generic pharmaceutical player to eventually become a leading CEE specialty pharma player, focused on a few key therapeutic areas notably dermatology, ophthalmology, urology and hospital injectables.

  • First investment was made in 2003.
  • In 2006 Invalda attracted a group of co-investors, led by CVCI, to finance the transformational acquisition of Polish generic pharma manufacturer Jelfa for EUR 161 million.
  • The total investment amount by Invalda throughout the holding period amounted to EUR 58.1 million. CVCI invested EUR 64.6 million.
  • The auction sale process culminated in the sale of the company to Valeant Pharmaceuticals International Inc., a leading Canadian / US specialty pharma company, in August 2011.

Investment Rationale

  • Unlocking latent value.
  • Restructuring of management.
  • Buy & build strategy implementation opportunities.
  • Strong exit visibility.

Value Creation during Invalda and CVCI ownership

HR and Talent management

Change of management. After the entry, Invalda appointed a totally new management team that drove a number of operational improvements, resulting in optimized working capital, increased efficiency, improved profitability and solid growth.

Alignment of interests. Incentivized management team for value creation through a management incentive plan for senior and middle management.


Operational Excellence

Product portfolio rationalisation to divest / terminate low margin product tail, in addition to the harmonisation of profitable products’ documentation in accordance with EU regulations.

Pricing management. A thorough review of pricing was undertaken to ensure adequate profitability, return on R&D investment and market positioning. Products that did not meet profitability or return requirements were discontinued unless there were important social reasons for keeping them, such as in the case of certain lifesaving hospital injectables where the company was the only generic producer in the region.

Optimisation of manufacturing capacity. Branded products were produced at Jelfa’s state-of-the-art facilities in Poland and the newly-built Sanitas facility in Kaunas, Lithuania, while low margin contract manufacturing was shifted to the Slovakian facility that had been acquired in 2005 and later sold as part of a rationalisation exercise.

Procurement. Consolidation of procurement process resulting in higher negotiation power which allowed to significantly improve raw material prices and delivery terms.

Innovation and Technology

Development of strong pipeline for new products. The company had suffered from a lack of innovation at the time of Invalda and CVCI’s initial involvement and this was totally reversed through a focus on new product development, eventually leading to c. 40 new product launches annually at the end of the ownership period.


Strategic Growth

Accelerated growth through value creating acquisitions to increase specialist manufacturing capacity, acquire niche products, and extend the company’s geographical presence:

  • In 2005 – expansion to CEE region by acquiring 100% of HBM Pharma. At the time Sanitas was in the process of building a brand new GMP compliant facility. During that period the Slovakian site served as a capacity buffer for the group. Following the completion of this site and acquisition of Jelfa, the company had excess capacity therefore the low margin contract manufacturing business, which had been concentrated at HBM Pharma, was eventually sold in 2010.
  • In 2006 the transformational acquisition of Jelfa in Poland was completed to accelerate growth and develop Sanitas as a regional leader: Sanitas acquired 100% of Jelfa, a generic manufacturer in Poland, for EUR 161 million. The portfolio of products was increased by more than 100 products and the sales market for the products expanded to cover Poland, Russia, Ukraine, Czech Republic, Hungary and Slovakia. Jelfa was acquired from Polish state entities, through the Polish state privatisation process with limited due diligence allowed. A number of issues had to be addressed following the acquisition, such as overstocking of the distribution channels, an instance of product cross contamination, organisational inefficiency among others, but all were successfully resolved through the combined efforts of Invalda, CVCI and the Sanitas management team, with no lasting reputational or financial damage.

In 2008 Sanitas acquired 100% of Homeofarm, a Polish company with an attractive product portfolio in derma cosmetics with the aim of complementing Sanitas’s already leading position within dermatology in CEE.


Positioned for Exit
  • Divested overcapacity.
  • Reduced leverage (from EUR 100 million in 2008 to EUR 55 million in 2011).
  • Sustainable, growing EBITDA and Cash Flow.
  • Strong pipeline of new product launches.
  • Regional leader covering whole CEE region.



Sanitas Group was sold to Valeant International Pharmaceuticals Inc. (global generic and specialty pharmaceutical company based in Canada and listed on the New York Stock Exchange), at an enterprise value of EUR 365 million.

EV/EBITDA multiple at the exit was 13.1x. This generated a 2.1x cash on cash multiple and IRR of 21.3% for Invalda.