Sale of a production business to a strategic investor (Sell-side M&A)
Competence area: Investment, M&A services
Industry/sector: pharmaceutical production / infusion solutions
Year of completion: 2010 - 2011
Client: Medpolimer, Russia
The Client’s key area of activity is Real Estate and CRE development. The infusion solutions production and sales business did not fit in the Client’s business portfolio; therefore, the Client decided to consolidate the existing business portfolio by selling the pharmaceutical producer to a strategic investor. When the Client approached Investorium, the owner had already found a potential buyer and even signed a Letter of Intent and Preliminary Sale-Purchase Agreement. Investorium’s job was to identify alternative buyers or investors and prepare to conclude a new transaction if the planned one fell through.
Scope of work:
Since the existing investor decided against the acquisition and in favor setting up its own production, the project was carried out as a typical Sell-side M&A assignment - one that involved a business analysis, a company valuation, a search for potential investors, deal structuring and closing. An investment proposal was written and, in the form of an Information Memorandum, was circulated among potential investors.
Due to the narrow specialization of the business being sold (the production of infusion solutions), new potential buyers who might be interested in acquiring this production asset were searched for both in Russia and outside. The overseas search was implemented with the help of Investorium’s international M&A partner network (companies and firms worldwide, specialized in mergers and acquisitions). The shortlisted potential investors were encouraged to familiarize themselves with the investment proposal and, once they confirmed their further interest, were invited to visit the production facility and meet with the Client for negotiations. It was a virtual tender that allowed us to identify the final bidder.
Investorium’s team, jointly with the Client’s specialists and lawyers, followed the transaction through all its stages: the initial negotiations, the Due Diligence check by the investor, the structuring and closing. As a result, the asset in question was acquired by a Russian strategic investor who, at the time of the transaction, owned several production facilities of this kind throughout the country, but had no production facilities in the North-West of Russia, which is the second largest market for infusion solutions in the country, the Moscow area being the first. Thus, the acquisition was a strategic investment for the Buyer and helped to maximize the Client’s gains from the sale.