The sale of an industrial 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: private investor, Russia

alt

Project background:

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.

Deliverables:

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.

Media coverage:

dp.ru

See selected project cases for reference

2020 Oil and gas fields acquisition risks analysis (Buy-side M&A) private investors, Russia See more 2014 - 2015 An assessment of a production assets pool development (Feasibility studies) GazpromTeploenergo, Russia See more 2014 Analysis of risks involved in an acquiring оf a CRE asset (Buy-side M&A) a subsidiary of Gazprom, Russia See more 2011 A feasibility study of heavy agricultural vehicles production a subsidiary of Energia Aerospace Corporation, Russia See more 2010 - 2014 Investor relations management for a CRE developer (Interim) Okhta Group, Russia See more 2008 - 2009 Managing a mix-use CRE development project (Interim) SRV Group, Finland See more 2006 - 2008 Assessing feasibility of investment in power generation and exports State-owned energy monopoly, Baltic States See more 2006 - 2008 Designing a strategic partnership and doing DD of multiple acquisition targets (Buy-side M&A) Paroc Group, Finland See more 2006 - 2007 Forming a strategic vision: the future of the United Energy System of Russia RAO UES (United Energy System) of Russia See more 2006 - 2007 Search and analysis of acquisition targets in Russia (Buy-side M&A) AF-Enprima, Sweden See more 2005 Acquisition of an engineering business in the EC (Buy-side M&A) private investors, Russia See more 2004 - 2005 Reorganizing a group of design engineering companies (Interim management) North-West Engineering Centre of RAO UES of Russia See more 2004 A feasibility study of a major infrastructure project (a heating main) StroyTransGaz, Russia See more 2003 - 2004 A mid-term strategy development for a power generation company Kirishi CHPP, Russia See more