Dubai Investments sells 66pc stake in pharma group
Dubai, June 26, 2014
Dubai Investments (DI), a leading investment company, said it has sold 66 per cent equity stake in its pharmaceutical subsidiary Globalpharma Company to a group led by healthcare giant Sanofi.
Globalpharma is a key manufacturer of pharmaceutical products under CGMP conditions including antibiotics, cardiovascular, anti-ulcerants, painkillers, food supplements, vitamins, anti-diabetics, respiratory products and anti-allergic formulations.
The transaction yielded a healthy IRR of 26 per cent over a 10-year period for the Dubai firm, said a senior official.
“Our investment in Globalpharma was well timed as we capitalized on the rapid growth in the pharmaceutical sector in the region. With the direction and support of DI, the management executed a successful strategy which has attracted a lot of strategic interest. This created the opportunity for our successful sell-down,” remarked Khalid Bin Kalban, the DI managing director and CEO.
The stake was divested to an investor group led by Sanofi, a leading global healthcare company headquartered in France, he revealed. DI will, however, continue to hold 34 per cent equity in Globalpharma, stated Kalban.
Pursuant to the agreements entered into between DI and the investor group today, Globalpharma will be managed as a Sanofi company and will become the platform to manufacture and promote the generics portfolio of Sanofi in the Middle East markets.
"We believe that the new partnership being forged with Sanofi will propel Globalpharma to the next level of its growth," he added.
DI commercialized Globalpharma in 2003 and grew the company to make it a market leader in certain therapies. Globalpharma is currently registered in more than 14 countries across the GCC, Middle Eastern and neighbouring markets.
The company has been achieving healthy double-digit growth year-on-year since 2010.
Kalban pointed out that the investment case for Globalpharma was compelling, as it was to operate in a pharmaceutical market which was expected to have uninterrupted growth in the region over coming years, driven by favorable demographics and increasing GDP per capita.
"The penetration of generic drugs manufacturing, which has historically been low in in the region, is now gradually increasing to European levels. We started Globalpharma and brought the right team and the right product mix. It is now time for a firm such as Sanofi, a global leader in pharmaceuticals, to take Globalpharma forward,"" he added.
DI’s divestment and agreement with Sanofi is first-of-its-kind in the Middle East Generics market that combines Sanofi’s strong heritage of international quality treatments with a local trusted partner in generics medications – Globalpharma – to reach more patients with affordable medications.
Globalpharma will be managed as a Sanofi company and will become the platform to manufacture and promote the generics portfolio of Sanofi in the Middle East markets. The portfolio will include anti-infective, cardiovascular and gastrointestinal products. Globalpharma will offer affordable treatment options to address the unmet healthcare needs of population in the Middle East region.
According to Kalban, Dubai Investments had always been at the forefront of identifying and implementing profitable businesses across sectors and markets.
"The divestment in Globalpharma is part of our strategy to continuously create value for our stakeholders. This strategic divestment and agreement with Sanofi will help grow Globalpharma’s capabilities in the region and ensure that it is meeting the needs of the regional healthcare industry," he noted.
"We are always on the lookout for strategic investments and divestments. Over the years, DI has always remained profitable with its prudent strategy aimed at boosting its profits and maintaining a high level of liquidity besides generating healthy returns for its shareholders," said Kalban.
"With a strong local footprint, Globalpharma will benefit from the wide-ranging Sanofi generics portfolio and pipeline as well as from the strong brand equity of Sanofi in the Middle East markets," he added.-TradeArabia News Service