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 Robert Wessman, former CEO of Actavis, founded the New Jersey-based
generic drugs firm in 2009.
The size of the stake the consortium purchased was not disclosed,
but the deal values the company at around $2 billion, a source
familiar with the matter said on Monday.
The transaction is the latest sign of the hectic pace of deal-making
in the healthcare sector, which has seen more than $250 billion of
mergers and acquisitions so far this year, up nearly two-thirds from
a year ago, according to Thomson Reuters data.
Wessman sold a stake in Alvogen to the private equity fund Pamplona
in 2014. The new owners also include U.S. investment group Vatera
Healthcare Partners. Wessman and Pamplona will retain a stake.
The fast-growing company currently has 350 generic products on the
market and has been pushing into the Asia-Pacific region with
several acquisitions, including that of South Korea's Dream Pharma
last year.
"We have grown from a small base in the U.S. back in 2009 to a
global player with operations in 35 countries," Wessman told
Reuters. "Our growth has been 76 percent a year in the past six
years, a majority being organic, but with access to network and
capital from our partners you should expect to see more
acquisitions."
Generic drugmakers like Alvogen are looking to get bigger to enjoy
economies of scale in manufacturing and distribution, while CVC has
an interest in health through previous deals, such as a 2012
investment in Chinese drugmaker Venturepharma.
"We want to be a company that can build up one of the leading
positions in Asia Pacific, and on a global level we expect to be
among the leading companies in a few years from now," Wessman said.
He explained Alvogen's strategy as focusing on high-growth emerging
markets, developing a "difficult to make" product portfolio in the
U.S. market, and building a strong presence in copies of biotech
drugs or biosimilars.
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Generic drugs are manufactured once the patent for a branded drug
has expired and sold far more cheaply than their original
counterparts.
Wessman and his team face increasingly tough competition, as rivals
also bulk up through takeovers or mergers, with Israel's Teva
Pharmaceutical Industries currently in a $40 billion pursuit of
Mylan.
Alvogen’s current revenue this year stands at $750 million, with
core earnings (EBITDA) of $220 million.
CVC has just bought the theater production company Stage and the
German perfume business Douglas, and recently hired Goldman Sachs
dealmaker Alex Dibelius as a managing partner.
Jefferies acted as financial adviser to the investment consortium,
while Goldman Sachs advised Alvogen and Pamplona.
(Additional reporting by Ben Hirschler; Editing by Kevin Liffey and
Jane Merriman)
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