Cinven to quintuple its money with AMCo sale

Cinven Partners LLP expects to make 5x its investment with the $3.5 billion sale of Amdipharm Mercury Ltd to Concorida Healthcare, PE HUB has learned.

The return includes a 20 percent stake in Concordia, a Canadian drug maker. On Tuesday, Concordia agreed to buy Amdipharm Mercury Ltd. for about $3.5 billion, including debt. The $3.5 billion will consist of $1.2 billion cash, $700 million stock as well as the assumption of $1.4 billion in debt. Concordia also will issue a performance-based payment of up to $220 million of cash payable in the fourth quarter 2016. The deal is expected to close in fourth quarter of this year.

London-based Amdipharm Mercury, or AMCo, has a portfolio of more than 190 drugs. The company expects to post revenue of $530 million to $560 million in 2015, a statement said. Concordia, of Oakville, Ontario, focuses on legacy pharmaceutical products. It will own all of AMCo, which will no longer exist as an independent company. The deal gives Concordia entry into areas such as endocrinology, ophthalmology and urology, Reuters said.

In October, AMCo was expected to pay out a 400 million pounds (643.76 million US dollar) dividend to Cinven as part of a wider 985 million pound recapitalization, Thomson Reuters Loan Pricing Corp. said.

Cinven, a European private equity firm, invests in sectors including business services, consumer, financial services, healthcare, industrials and TMT. In June, Cinven agreed to buy Synlab, a German laboratory operator, from BC Partners for $1.9 billion to $2 billion.

The PE firm bought Mercury Pharma and Amdipharm in 2012 and merged them to create AMCo, an international pharmaceutical firm with revenues of around 300 million pounds generated across 112 countries, Reuters said.

Cinven sounded out prospective bidders for AMCo in February, Reuters said.

The firm used its fifth European buyout fund to invest in AMCo. The fifth Cinven fund closed at 5.3 billion Euros ($7.1 billion) in 2013. The pool is producing a 1.16x average multiple, data provider Bison said.

Jefferies and Rothschild advised Cinven/AMCo while Goldman Sachs provided financial advice to Concordia.

Executives for Cinven declined comment.

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