Advent International has agreed to sell its stake in its Latin American portfolio of pharmaceutical companies to Procaps Group. No financial terms were disclosed. The portfolio includes Somar and Quifa.
MEXICO CITY, May 18, 2022– Advent International (“Advent”), one of the world’s largest private equity investors, today announced it has entered into an agreement to sell its stake in its Latin American portfolio companies in the branded generic and generic pharmaceuticals space, Grupo Farmacéutico Somar (“Somar”) and Química y Farmacia and related entities (“Quifa”, and together with Somar, the “Somar Group”), to Procaps Group (Nasdaq: PROC), a leading integrated international developer of pharmaceutical and nutraceutical solutions, medicines, and hospital supplies.
Since Advent’s investment in October 2017, the Somar Group has achieved record organic and inorganic growth through product portfolio expansion, by developing and launching several new molecules, and salesforce expansion and effectiveness initiatives. Additionally, following Advent’s acquisition of Quifa earlier this year, the Somar Group was able to solidify its position as a leading branded generics and generics player in Mexico with a combined portfolio of more than 210 commercialized products, best-in-class manufacturing capabilities and the ability to export to the United States. In order to do this, Advent partnered with a very strong management team.
“We are proud of the pharma platform we have built and are thrilled about the outcome, which was only possible with the dedication and collective effort of Grupo Somar´s strong management team” said Ariel Blumenkranc, Managing Director of Advent in Mexico. “We believe Procaps Group is ideally positioned to support these businesses as they continue to expand their footprint in Latin America and globally, and we wish the teams the best in this next phase of their journey.”
This transaction demonstrates Advent’s ability to make carve-outs investments, having invested in Somar in 2017 and Quifa in 2021 (both former subsidiaries of publicly traded companies). Advent has completed more than 70 carve-outs globally and has helped these businesses accelerate their growth by applying its deep sector expertise, international network, and world-class support resources.
“Latin America is a region Advent has seen significant opportunity over the years, and we are very pleased with the performance and growth of the Somar Group,” said Juan Pablo Zucchini, a Managing Partner at Advent International in São Paulo. “We believe Procaps Group is a very good harbor where the Somar Group and its strong management team will continue to grow, developing new products and technologies both in Mexico and Latin America.”
“We are thrilled to execute an important milestone on our long-planned rollup strategy with an ideal acquisition target for Procaps,” said Ruben Minski, CEO of Procaps. “We believe Grupo Somar´s diversified portfolio of innovative products alongside its management and technical capabilities will help accelerate Procaps’ top and bottom-line growth into the near future in an accretive manner.”
Advent International has invested over $7.0 billion in 65 companies across Latin America, and has been present in Mexico since 1996 where it has been committed to the economic development of the country and the region for over 25 years. During this time, Advent has invested approximately $1.1 billion in more than 20 companies with headquarters or operations in Mexico, including several businesses dedicated specifically to the development and distribution of pharmaceutical products. In addition to Somar and Quifa, its investments in the sector regionally have included Grupo Biotoscana (South America), Laboratorios LKM (Argentina) and Fada Pharma (Argentina).
The transaction, which has been approved by Procaps Group’s Board of Directors, is subject to approval by the Federal Economic Competition Commission (COFECE) and other customary closing conditions.
About Advent International
Founded in 1984, Advent International is one of the largest and most experienced global private equity investors. The firm has invested in 390 private equity investments across 42 countries, and as of September 30, 2021, had €75 billion in assets under management. With 15 offices in 12 countries, Advent has established a globally integrated team of over 255 private equity investment professionals across North America, Europe, Latin America and Asia. The firm focuses on investments in five core sectors, including business and financial services; health care; industrial; retail, consumer and leisure; and technology. For over 35 years, Advent has been dedicated to international investing and remains committed to partnering with management teams to deliver sustained revenue and earnings growth for its portfolio companies.