Medios acquired Ceban Pharmaceuticals from Bencis Capital Partners

Stem op deze deal via de stempagina: https://mena.nl/genomineerden-best-deal-2024/

Name of the deal: Medios acquired Ceban Pharmaceuticals from Bencis Capital Partners
Date announced and/or closed: Announcement date 18/03/2024. The transaction was completed in Q2 2024.
Published value:  €260 million
Buyer(s): Medios
Target(s): Ceban Pharmaceuticals
Seller: Bencis Capital Partners

Involved firms and advisors

Involved firms and advisors buy side:
Legal advisor: Stibbe, Morrison & Foerster LLP (as German counsel)  Financial advisor: KPMG   Financial DD: KPMG  Tax advisor: Meijburg & Co

Involved firms and advisors target: –

Involved firms and advisors sell side:
Legal advisor: Hogan Lovells  Financial advisor: PwC  M&A advisor: Jefferies

Pitch

Brief description deal / Deal outline
Medios AG, a leading German provider of specialty pharmaceutical solutions, has acquired Ceban Pharmaceuticals B.V. (“Ceban”), a fast-growing pharmaceutical compounding platform with operations in the Netherlands, Belgium, and Spain. Ceban was acquired from Bencis, a Dutch private equity firm, as part of Medios’ strategic plan to build the leading European specialty pharmaceutical platform.

Ceban was since February 2019, under ownership of Bencis. During their holding period the company has developed from predominantly a chain of pharmacies in the Netherlands (“Medsen”) into a fast-growing leading platform for pharmaceutical compounding of personalized medicine active in the Netherlands, Belgium and Spain. The value creation was the result of organic growth and multiple strategic acquisitions like the acquisiotion of a majority stake in the Belgium-based Magis Pharma.

The transaction involves Medios acquiring a 100% stake in Ceban for a total purchase price comprising €235.3 million in cash and 1.7 million newly issued Medios shares, valued at approximately €23.9 million. These new shares will be subject to a 24-month hard lock-up period. The purchase price will be financed through Medios’ existing cash reserves and a committed credit facility, with the new shares being issued from authorized capital as a contribution in kind.

This acquisition marks a significant step in Medios’ growth strategy to expand its presence across Europe.

Medios preliminary figures for 2023: Group revenue increased by c. 11.0% to around €1.8 billion; EBITDA pre1 increased by 10.3% to around € 60.5 million with an accordingly stable EBITDA pre1 margin of 3.4%.

Due to the acquisition of Ceban in the second quarter of 2024 Medios expects a substantial increase in revenue and margin for FY 2024: revenue in a range of €1.9 to €2.1 billion and in a range of EBITDA pre from €82 to €91 million, which reflects a margin of around 4.3% based on the mean value of the respective revenue and EBITDA pre1 range. Mid-term outlook for FY 2025: Revenue of around €2.15 billion and EBITDA pre of approx. €110 million reflecting a margin of 5.1% in FY 2025.

Why should this deal win the Award for Best Deal Mid-Cap 2024?
This acquisition represents a transformative transaction for Medios and a significant milestone in its European growth strategy. By acquiring Ceban Pharmaceuticals, Medios gains strategic diversification, expanding its product portfolio and entering new, profitable growth markets with progressive regulatory frameworks for pharmaceutical compounding. The deal also positions Medios to benefit from substantial cross-border synergies, both operationally and commercially, making it a model for successful international M&A in the pharmaceutical sector.

Ceban’s portfolio not only broadens Medios’ service offerings but also opens up new markets across the Netherlands, Belgium, and Spain, while strengthening its foothold in the largest pharmaceutical market in Europe—Germany. Medios’ extensive partner pharmacy network in Germany offers Ceban a valuable entry point into this market, creating significant cross-selling and upselling opportunities. Ceban, in turn, will benefit from Medios’ robust relationships with major pharmaceutical companies, providing a reliable supply chain, excellent product availability, and purchasing power.

By integrating Ceban’s compounding capabilities, Medios enhances its operational efficiency and innovation capacity, solidifying its position as a leading European specialty pharmaceutical platform. This acquisition supports Medios’ vision of building an international network of pharmaceutical compounding facilities aimed at becoming a key player in the manufacturing of personalized medicines.

The combination of strengths between Medios and Ceban yields immediate strategic synergies, including cost savings in purchasing and expanded geographic reach. Medios’ network of 850 specialized partner pharmacies in Germany offers Ceban a powerful distribution channel for its Active Pharmaceutical Ingredients (APIs) sourced from Belgium and Spain, further boosting growth across Europe.

This deal is not just about geographic and service diversification; it also addresses a pressing issue in the healthcare industry—the shortage of essential medications. With Ceban’s compounding expertise, Medios can mitigate supply chain disruptions and ensure the availability of personalized medications during shortages. This strengthens Medios’ market position while positively impacting patient care by addressing critical medicine shortages and improving healthcare delivery.

Despite its complexity, including Ceban’s transformation from a traditional pharmacy to a pharmaceutical compounder, asset swaps, divestments, and acquisitions, this deal demonstrates how well-structured, cross-border transactions can drive both corporate growth and societal benefits.

Deal rationale
The acquisition of Ceban represents a key milestone in Medios’ strategy to build the leading European specialty pharmaceutical platform. It enables Medios to establish an international network of GMP laboratories, positioning the company as a partner of choice for the compounding of personalized medicines. By combining the strengths of both companies, the deal unlocks significant strategic, operational, and commercial synergies, such as procurement savings, while creating immediate up- and cross-selling opportunities across complementary geographic markets.

Ceban, the market leader in pharmaceutical compounding in the Netherlands, with growing positions in Belgium and Spain, strengthens Medios’ presence in these markets. The acquisition allows Medios to capitalize on the strong growth of home care, clinics, and hospitals in these regions, while significantly expanding its patient-specific therapies segment. This, in turn, enhances the profit margins of the entire Medios Group and supports its broader growth ambitions across Europe.

What is the impact of this deal on the company?
Ceban is the market leader in pharmaceutical compounding in the Netherlands, ranks in the top 3 in Belgium, and is among the top 5 in Spain. The company supplies approximately 3,300 pharmacies and over 200 hospitals, and it owns its own pharmacy chain. Ceban covers the entire pharmaceutical value chain, from the procurement of Active Pharmaceutical Ingredients (APIs) to the sterile and non-sterile production of medicines, supplying both public and hospital pharmacies, as well as providing homecare services for patients. With long-standing relationships across the value chain, Ceban is well positioned to meet the rapidly growing demand for pharmaceutical manufacturing from clinics, pharmacies, and hospitals.

The acquisition of Ceban is a major milestone in Medios’ European expansion strategy. Ceban’s strong market positions in the Netherlands, Belgium, and Spain provide Medios with significant growth potential and strategic diversification. Leveraging Medios’ established specialty pharma platform in Germany, the acquisition also generates cross-selling opportunities and synergies in procurement. Overall, this transformational transaction strengthens Medios’ foothold in key European markets, enhancing both its profitability and its ability to access attractive growth sectors.

What is the impact of this deal for the direct stakeholders?
For Medios, this acquisition is a strategic move to broaden its portfolio, particularly in specialty pharmaceuticals. It allows Medios to strengthen its market presence, expand its product range, and enhance distribution capabilities across Europe. If Medios successfully integrates Ceban’s product lines, the deal could lead to significant revenue growth by realizing synergies such as operational efficiencies and expanded market access.

For Ceban, the acquisition brings the support of Medios’ established specialty pharma platform and expertise. Ceban’s experienced management team will remain in place, helping to drive growth in both existing and new regions. This continuity benefits patients, healthcare institutions, and health insurers by ensuring a continued supply of high-quality, individualized pharmaceutical preparations. The new international setup with Medios also positions both companies to better address increasingly common drug shortages.

Under Medios’ ownership, Ceban may shift its strategy to align more closely with Medios’ core focus on specialty pharmaceuticals. This could include new investments in research and development, product innovation, and expansion into additional markets, further enhancing its capabilities and impact.

What is the impact of this deal on society?
This acquisition has the potential to positively impact society by improving access to specialized medicines, particularly for rare or chronic diseases. Medios’ broader distribution capabilities and extensive network could lead to better availability of these medicines across more regions, helping to address shortages of critical drugs. By integrating Ceban’s expertise in pharmaceutical compounding, Medios can enhance its ability to produce custom pharmaceutical preparations, ensuring a more reliable supply chain for high-demand and essential medications. This could significantly improve patient care, particularly in addressing unmet medical needs.

Additionally, Medios might increase investment in research and development at Ceban, potentially driving the creation of new therapies and treatments. Such efforts, especially if focused on rare diseases or unmet medical needs, would benefit society by improving healthcare outcomes. Collaborations with healthcare providers could lead to innovative drug development and clinical trials, contributing to advancements in medical treatments.

What was most complex about this deal?
This deal was complex due to several factors, including the strict regulatory requirements governing the pharmaceutical industry. The transfer of ownership required careful compliance with health and safety regulations, particularly across the European Union, where Ceban operates. Ensuring uninterrupted operations during the transition while maintaining full regulatory compliance was a major challenge.

Another layer of complexity came from Ceban’s strategic transformation, involving a significant asset swap with Brocacef, where Ceban traded a portion of its pharmacy operations for Brocacef’s compounding business. This transformation, combined with other elements like the involvement of multiple entities, a buy-and-build strategy, and the need to buy out minority shareholders, added complexity to the deal. Additionally, the financial structuring involved negotiating future revenue streams, intellectual property, R&D projects, and existing contracts—all of which required balancing risk and reward while accounting for potential regulatory and market changes.