Business
Current 3i portfolio company, Axellia, a
€258 million buyout from Alpharma in the
first half of 2008, reinforces the firm’s
appetite for opportunities that command an
interesting value creation story, this time in
the active pharmaceutical ingredients (API)
field. Mr Malkomes recalls his involvement in
the investment: “It is focused on the
manufacturing of APIs in the specialist niche
of fermentation-based antibiotics and fill/
finish products. Axellia has a global presence
with manufacturing facilities in both Europe
and Asia, and importantly, it offers a broad
range of value creation opportunities in a
growing market.”
Not so long ago, there were tantalising
rumours fuelling speculation over a potential
big pharma takeover by one of the world’s
larger private equity players. Current turmoil
in the financial markets may well have put
such ambitious buyout plans on the back- he explains. “Some recent deals, particularly investment was “really about backing Bryan
burner for the time being, but there’s no with Eastern European businesses, haven’t Morton, president and CEO, and his
reason for private equity to take its eye off completed – presumably because they management team to build that business,”
opportunities in mid-cap speciality pharma, couldn’t agree on valuations, or certainly the explains Dr Hargreaves. “It’s grown from a
notes Mr Malkomes. valuation expectations of sellers. You would small European business to a pan-European
Axellia is one of seven investments that 3i expect valuations to decrease over the next business, and now with the acquisition of US
has made within various healthcare sectors 12 months and that sellers will have more firm Cytogen into a global business.” Eusa
and geographies in 2008. “The strength of realism in their expectations about pricing.” Pharma now has offices in the US and
our network means that we see the majority Europe and is targeting the hospital market
of healthcare opportunities available. backing company management with products in the areas of oncology, pain
However, we remain a highly selective In an industry like pharma, which has science and critical care.
investor,” says Dr Hargreaves, who expects at its very core, the quality of a company’s Dr Hargreaves talks of 3i’s pride in its
the credit crunch to bring about a healthy assets and technologies are key partnership style. “We believe in providing
dose of reality checking on the part of considerations in the eyes of potential more than just capital. Unless we thought
vendors. “Prices and valuations have been investors. But what about that less tangible we could add value to a business we
increasing quite significantly over the past few factor: the people? In the case of speciality wouldn’t invest in that business.” From that
years, with pretty high multiples being paid,” pharma company Eusa Pharma, 3i’s perspective, 3i draws strength from the
diversity of its own staff. Dr Hargreaves is a
pharmacist by training with more than 20
Table 1: Selected 3i healthcare investments
years’ pharma industry experience, while
Company Headquarters Detail Mr Malkomes’ background includes various
senior positions, most recently at Merck
Ambea Sweden Leading Nordic healthcare provider of primary,
KGaA – including country management
disabled and acute care services to the private
and public sectors
responsibilities – before which he worked in
investment banking. Similarly, significant
Axellia Norway Global supplier and developer of APIs, healthcare and financial sector expertise
specialising in injectable antibiotics
runs throughout 3i’s core international
healthcare team.
Eusa Pharma UK Transatlantic speciality pharma company with a
portfolio of drugs for pain, oncology and critical care
Over many years, Dr Hargreaves explains,
3i has built relationships with an active
Labco France Pan-European medical diagnostic group with network of business leaders, comprising non-
more than 250 clinical laboratories across six
executive chairs, non-executive directors and
countries
senior advisors. “Peter Chambré, a former
LHi Technology Singapore Medical cables manufacturer supplying
CEO of Cambridge Antibody Technology, is
exclusively to international medical device
working with us and he’s now chairman of
companies and original equipment manufacturers two of our companies. We’re increasingly
partnering with business leaders from the
Phibro Animal North America Of_f ers medicated and nutritional feed additives
industry to help to guide our investment
Health and vaccines to poultry, pig and cattle producers
decisions and advise strategy with our
Quintiles North America World-leading provider of clinical research
portfolio companies. Active partnership is not
outsourcing services to pharma and biotech just a philosophy, it is an approach to our
clients work that is embedded throughout our
team.”
Ultralase UK Provider of laser vision correction treatment
through a network of 17 clinics across the UK
Pete Chan is editor of the Scrip 100.
Source: 3i
www.scripnews.com/supplements Scrip 100
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