3 Min Read
SAO PAULO (Reuters) - The billionaire owners of Uruguay's Mega Pharma SA have hired Jefferies LLC to explore alternatives for Latin America's No. 4 pharmaceutical company, which could include debut bond and stock offerings, two people with knowledge of the matter said.
According to the people, Mega Pharma would first issue a bond as early as this year. Tapping global debt markets first would speed up a plan by Germany's Struengmann family to market a future initial public offering globally, the people said.
Mega Pharma, which is based in an industrial park in the Uruguayan city of Canelones, is controlled by twin brothers Andreas and Thomas Struengmann - also the founders of generic drugmaker Hexal AG that was sold to Novartis AG 12 years ago and a fixture in recent biotech investment rounds.
Both the Struengmanns and Mega Pharma, which has $1 billion (787.6 million pounds) in annual revenue and 10 factories across Latin America, considered listing the stock in the United States and either Colombia, Brazil or Argentina, the people said.
Jefferies declined to comment. The Struengmanns and Mega Pharma did not respond to requests for comment. The people spoke under the condition of anonymity to discuss the plans freely.
Their quest for investor money underscores how pharmaceutical deals could gain further steam in a region where demand for medicines has spiked in recent years. Some biotech investors globally are also burning through cash faster than ever before, as they try to turn their companies into specialty pharmaceutical firms.
In the 12 months through June 22, there were 21 pharmaceutical-related mergers and acquisitions in Latin America, compared with only five in the same period a decade ago, according to Thomson Reuters data.
Based on the value of recent pharmaceutical deals in Latin America, Mega Pharma could be worth about $2.5 billion, private equity bankers told Reuters. Mega Pharma's focus on branded medicines has shielded it from heightened competition in generic drugs, a segment that has seen declining returns in recent years, the same bankers said.
The Struengmanns joined Mega Pharma when Argentina's Laboratorios Roemmers SA decided to form a unit grouping some local assets in Argentina with others in Uruguay, Mexico, Dominican Republic, Ecuador and Venezuela. A year ago, Mega Pharma opened Mega Labs, a $110 million compound in Uruguay that is so far its largest.
They own stakes in German biotech firms Glycotope and BioNTech. Along with buyout investors, three years ago they purchased a hearing aid devices producer from Siemens AG. Since selling Hexal, the Struengmanns have invested in banking too.
A month ago, the brothers agreed to sell their German regional lender Suedwestbank AG, their main investment in banking and which they bought in 2004, to a Cerberus Capital Management LP-led bank from Austria.
Additional reporting by Malena Castaldi in Montevideo; Editing by Guillermo Parra-Bernal and Lisa Shumaker