Galenica talking its way out of Sicomed

1Greek investment company Global Finance and Fondul Roman Post Privatizare (Romanian Post-Privatisation Fund – FRPP) are in advanced talks to indirectly buy another almost 20% in Sicomed Bucharest, Romania’s leading drug maker, market sources say.

The seller will be Galenica Nord East connected with Greek drug making group Galenica. The deal will be closed some time soon and will be done inside Venoma Holdings, an investment vehicle used by the three partners to acquire approximately 58% in Sicomed back in 1999.

Venoma Holdings is now equally held by Global Finance, FRPP and Galenica Nord East.

The deal will end with Global Finance and FRPP owning half of Venoma Holdings each, that is some 30% of the Sicomed shares.

Venoma acquired majority in Sicomed following an about $14 million investment. The deal by which Galenica will sell its Venoma shares and implicitly Sicomed is estimated to $5-$10 million.

The Global Finance and FRPP representatives did not care to comment on any transaction-related information.

Sicomed is listed on the Bucharest Stock Exchange and its market capitalisation amounts to about $60 million. The company made $47 million preliminary turnover last year and $4.5 million net profit. Sicomed accounts for 5.5% of the Romanian drug market, and is one of the main players there along with GlaxoSmithKline (11.5% of the market), Novartis and Pfizer.

The investment funds and Galenica, through Venoma, took control of the company in 1999, following acquisition of shares on the Stock Exchange and capital increases. The purpose of the three partners was to streamline the company and sell it to a strategic investor interested in Romania five or six years later.

The “resettling” of Venoma’s shareholder structure can be considered a step preceding the start of the procedures for Sicomed’s sale in 2005.

The Romanian drug market saw a major deal last year, when several investment funds sold Terapia Cluj Napoca, the second leading Romanian producer. The buyer was the American financial group Advent International, and the deal was worth some $43 million. Venoma shareholders have restructured Sicomed both in terms of products and in terms of human resources and technological processes over the last few years.

Human resources-wise, the restructuring will end when 30% of the employees have been laid off. Technically speaking, the company last year concluded a $15 million upgrade process in view of compliance with the GMP standards. The company has been run by a Dutch manager, Klaas Postema since the summer of 2002.
laurentiu.ispir@zf.ro