Two investment funds to take over Stada and Hemofarm for EUR 5.31 billion – No layoffs planned, changes opportunity to penetrate new markets

The German pharmaceutical group Stada, within which the Vrsac-based Hemofarm has been operating since 2006, has accepted the bid for takeover of shares worth EUR 5.31 billion by two investment funds, Bain Capital and Cinven. This was officially confirmed on Wednesday, April 19, 2017, by Stada CEO Matthias Wiedenfels.

– Following several months of negotiations with the American fund Bain Capital and the British fund Cinven, the share price of EUR 66 (65.28 plus dividend) was agreed on. The Managing Board and the Supervisory Board of Stada have accepted the price as adequate and recommended to shareholders to sell their stocks – said Wiedenfels, who has visited the company's seat in Vrsac together with Hemofarm CEO Ronald Seeliger in order to inform the employees of Stada's decision to accept the takeover bid and explain what it means for them.

As explained, the ownership has changed, but not the manner of operations. The claim that there won't be layoffs, at least not in the next four years, and the possibility of new investments is not excluded either.

New chapter in Hemofarm development

The conversation between the head of the Stada group with the Hemofarm employees was transmitted live through a video link so that other employees in all Stada's factories and offices in Southeastern Europe could follow it as well.

Wiedenfels said that he had arrived to Vrsac to transfer three messages to the employees. The first is that an agreement with the two funds has been reached, the second that the managing and the Supervisory Board of Stada have approved the agreement and the third that a very good agreement has been reached, not just from the aspect of Germany, but the whole Europe as well.

– This is the strongest investment agreement ever negotiated in Germany. We had very long and difficult negotiations, and these were not just two funds, but four companies we negotiated with – Wiedenfels said.

As eKapija previously reported, aside from Bain Capital and Cinven, Stada also negotiated with the Chinese company Shanghai Fosun Pharmaceutical and the consortium of Advent and Permira.

– The funds will receive 100% of the ownership, but won't change the company's strategy. They've recognized great value in our locations and we are convinced that it is not their intention to tear the company apart – Wiedenfels emphasized and added that the negotiated agreement was very important for all Stada members, including Hemofarm.

Presenting the vision of the company's further growth, he emphasized that the said offer was strengthened by the agreement which guaranteed further development of all key units of Stada.

– Employees in Serbia, 3,000 of them, as well as their colleagues in 30 countries throughout the world have no reason to worry, as the future owner has obliged not to change labor rights or salaries, as well to refrain from layoffs in the next four years, except for those already planned – Wiedenfels pointed out and added that he assumed that there would be new investments, not just in Vrsac, but the entire region as well.

CEO of Hemofarm and Vice President of Stada for Southeast Europe, Ronald Seeliger, emphasized that Hemofarm had been in a similar situation ten years before when the acquisition by Stada had been conducted.

– That investment, worth several hundreds of millions of euros, brought together German efficiency and the dedication of people at Hemofarm, bringing Hemofarm up to the level of the regional leader in medical drug manufacture and export. We have now entered a new phase, so that we could enhance out operations – Seeliger stated.

Seeliger reminded that Hemofarm exported to 38 countries, had more than 3,000 employees and modern factories in Serbia, Montenegro and Republika Srpska, operating in line with the highest international pharmaceutical standards.

Thereby, as concluded at the meeting, the new change in the ownership structure is an additional motive to strengthen the position in the current markets, as well as an opportunity to penetrate new markets on all continents.

Support for new acquisitions

As reported by Belgrade media, the plan of the current management is for Stada to have revenues of EUR 2.7 billion and a profit of around EUR 590 million in 2019, and the future owners accept the vision of development – they are ready to secure financial and strategic support for potential acquisitions, expansion of the range of products and penetration of new developing markets.

Hemofarm in Stada

Last year's strategic reorganization of Stada lead to the formation of the group for Southeast Europe, headed by Hemofarm, making Serbia the regional hub of the multinational concern. Hemofarm manages operations in Southeast Europe, covering Hungary, Slovenia, Croatia, Bosnia and Herzegovina, Albania, Bulgaria, Romania and Serbia.

Let us remind that Stada bought 98% of the Vrsac-based pharmaceutical company's stock in August 2006. The German group paid slightly over EUR 475 million for 3.3 million Hemofarm shares, offering EUR 146.97 per share.

Hemofarm is among the leading medical drug manufacturers and exporters from Serbia. They produce more than four billion tablets and capsules a year, and, in 2016, looking by production units, 72% of the production was exported. In the past year, Hemofarm has carried out two acquisitions in Serbia. Since August 2016, Ivancic i Sinovi has operated within Hemofarm, and they also acquired Velexfarm, which deals in wholesale of pharmaceutical products, in early 2017.

S.S.

STADA Grupa

Hemofarm a.d. Vršac

Bain Capital Boston

Cinven Partners LLP

Stada

Stada Group

Hemofarm

sale of Stada

Bain Capital

Cinven

takeover of Stada Group

Matthias Wiedenfels

Ronald Seeliger

Shanghai Fosun Pharmaceutica

consortium of Adventa and Permira

takeover of Stada

acquisition of Stada