|Company Description||Generic pharmaceutical manufacturer|
|Amount Invested||EUR 58.1 million|
|Realised Value||EUR 123.9 million|
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.
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.
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.
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.
Accelerated growth through value creating acquisitions to increase specialist manufacturing capacity, acquire niche products, and extend the company’s geographical presence:
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.
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.