Global private equity firm Riverside has acquired pharmaceutical sales company Meda’s Barcelona-based herbal extracts producer Euromed for about €82 million.
The carve-out, completed at the end of December 2015, was implemented because Euromed was “a non-core business for Meda and through this [they] have been able to improve manufacturing efficiency” a Meda spokesperson told Agri Investor.
Meda acquired Euromed as part of Rottapharm, an Italian pharmaceutical company it bought in 2014. The company processes more 4,000 tons of raw materials like gingko and echinacea to produce 600 tons of extract a year for the dietary supplement, pharmaceutical and cosmetic industries, according to Euromed’s website. Euromed generates annual sales of around €40 million and has an earnings before interest, taxes, deprecation and amortisation margin of around 20 percent.
Principal Rafael Álvarez-Novoa, who sourced the deal for Riverside, said that “high entry barriers and significant growth avenues” in the extracts industry made Euromed an attractive buy.
Euromed has historically been the supplier of an ingredient extracted from milk thistle for Legalon, and has 350 other customers globally. In addition, Meda and Riverside have agreed “a favorable long-term strategic supply arrangement with fixed prices for a considerable time”, according to Meda.
Riverside plans to drive growth “by boosting production, improving operations and continuing to invest in research and development”, it said in a press release. The firm also wants to help the company expand in the US and Asia, where it says the dietary supplements market is expected to grow.
The Riverside Company concentrates on investing in growing businesses valued at up to $300 million and has invested in over 400 transactions since 1988, according to the firm.