introduction to rothschild healthcare · 2014. 11. 24. · rothschild’s objectivity, its global...

November 2014

Introduction to Rothschild Healthcare

Contents

Sections 1 Introduction to Rothschild 2

2 Rothschild Healthcare 6

3 Selected recent case studies 9

4 Rothschild Life Sciences credentials 20

1

1. Introduction to Rothschild

How we operate and why we are different from our competitors

Nothing gets in the way of our impartial advice for each and every client We sell nothing but our best advice and execution capabilities

Focused on clients

Expert advice

Senior bankers lead every assignment from start to finish We advise on more deals than any other advisor, including many of the most complex or transformational in the world All Rothschild clients benefit from our collective intellectual capital, specialist sector and product expertise and wealth of

experience

Informed

We combine global scale with deep local networks With c.900 advisors on the ground around the world, we are well placed to help clients, wherever their business takes

them Given our significant deal volume (250+ deals in 2013) we have unparalleled insight into the market

Long term As a family controlled business, we are unconstrained by short-term thinking and quarterly reporting We can take a long term view to deliver each client’s interests

Trusted & independent

We know that long-lasting relationships depend on the quality of our advice; we care about our clients’ success as much as they do

The scale of our business means that we are not dependent on the outcome of any one transaction We are only as good as our last assignment This has been true for more than 200 years

Rothschild’s objectivity, its global network, and its commitment to a relationship-driven approach, combine to create value for our clients; building value through stability, integrity, and creativity

1.1 Introduction to Rothschild International investment bank providing robust, objective advice

“It takes a great deal of boldness and a great deal of caution to make a great fortune; and when you have got it, it requires ten times as much wit to keep it.” N M Rothschild (1777-1836)

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4

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Facing Page 4

We field c.900 advisory bankers in 40 countries

. . . more than any other advisory house

Rothschild offices,

Melbourne Sydney

Moscow

Auckland Wellington

Mexico City

Washington

Toronto New York

Johannesburg

Mumbai

Singapore

Beijing

Shanghai

Jakarta

Hong Kong Dubai

Kuala Lumpur

Seoul

Abu Dhabi

Leeds Warsaw

Paris Milan Istanbul

Athens

Manchester Birmingham

London

Madrid Lisbon Barcelona

Stockholm

Sofia

Tel Aviv

Prague Kiev

Manila

Bucharest

Tokyo

Budapest

Hanoi

Sao Paulo

Santiago

Doha

Frankfurt

JVs and alliances

Copenhagen

Houston

Los Angeles

600 bankers

Europe

120 bankers

US & Canada

90 bankers

Asia

40 bankers

Australia 20 bankers

Latin America 30 bankers

Middle East & Africa Track Record

Transaction split

Source Thomson Reuters, Dealogic

Rank by number ‘08

‘09 ‘10

‘11

‘12

‘13

Europe 1 1 1 1 1 1

UK 1 2 1 1 1 1

France 1 1 1 1 1 1

Italy 4 4 3 2 5 5

Germany 4 4 1 1 1 1

Worldwide 7 7 5 3 3 3

Announced deals (Jan 1 to Dec 31 2013) Source ThomsonOne

32%

20%17%

10%

21%

< $100m $100m – $250m

$250m – $500m $500m – $1bn

> $1bn


1.2 Introduction to Rothschild

Industry recognition

2014 UK Small Deal of the Year 2014 France and Benelux Deal of the

Year 2014 Mediterranean Deal of the Year 2014 IPO of the year – Foxtons Group

2014 Americas M&A Deal of the Year - Sprint Nextel’s disposal of a 78% stake to Softbank

2014 Americas Restructuring of the Year - American Airlines’ exit from Chapter 11 & merger with US Airways

2014 award for Client Service Quality to Ultra High Net Worth clients

2011-2014 Best Restructuring Adviser 2014 Best Adviser for Private Equity

2014 Mining Deal of the Year and Finalist, Deal of the Year Overall –Antofagasta and Marubeni’s project financing of Antucoya

2014 Public Markets Deal of the Year - £1.2bn flotation of AO

2014 Non-Traditional Deal of the Year – The University of Manchester’s £300m bond issue

… offering a full package of advice…

Unrivalled track record, consistently advising on more deals than any other adviser in our core markets M

&A

With teams on the ground in key markets around the world, we have an unparalleled global footprint and deeper resources than any other adviser

Equi

ty

The most experienced independent debt advisory practice in the world with an unsurpassed volume of deals and expertise across markets.

Deb

t

+

Regularly placed at the top of the restructuring league tables in terms of number of deals

Res

truc

turin

g

+

+

… leading to long term clients

> 17 years

> 19 years

> 12 years

> 100 years

> 30 years

Industry leading…

Sources Rothschild, Thomson Reuters (3 Jan 2014) Notes Announced deals by number (1 Jan to 31 Dec 2013)

Sources Rothschild, Thomson Reuters (3 Jan 2014) Notes Announced deals by number (1 Jan to 31 Dec 2013)

# Global M&A US$bn No.

1 Goldman Sachs 622.2 3292 Morgan Stanley 503.6 2743 Rothschild 146.9 2524 J.P. Morgan 524.1 2355 Lazard 218.1 2356 BAML 397.0 2187 Citi 370.7 2058 Credit Suisse 317.5 2039 Barclays 430.7 19010 Deutsche Bank 337.3 175

# European M&A US$bn No.

1 Rothschild 74.8 1692 Lazard 59.2 1203 Goldman Sachs 137.8 1124 BNP Paribas 65.1 935 Morgan Stanley 133.5 836 Deutsche Bank 90.8 797 J.P. Morgan 110.9 718 Barclays 68.1 719 Citi 73.0 6810 BAML 78.8 61


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1.3 Top global advisor

Selected transactions

2012 Global M&A US$bn No

1 Goldman Sachs 717.6 428 2 Morgan Stanley 548.1 389 3 Rothschild 212.2 303 4 JP Morgan 444.3 285 5 Barclays 470.7 274 6 Credit Suisse 400.6 271 7 Citi 426.9 252 8 Deutsche Bank 378.8 245 9 BoA/ML 351.7 224

10 UBS 213.8 184

Announced deals by number (1 Jan to 31 Dec 2012) Source Thomson Reuters 2 Jan 2013

2013 Global M&A US$bn No

1 Goldman Sachs 622.2 329 2 Morgan Stanley 503.6 274 3 Rothschild 146.9 252 4 Lazard 218.1 235 JP Morgan 524.1 235

6 BoA/ML 397.0 218 7 Citi 370.7 205 8 Credit Suisse 317.5 203 9 Barclays 430.7 190

10 Deutsche Bank 337.3 175

Completed deals by number (1 Jan to 31 Dec 2013) Source Thomson Reuters 01 Jan 2014

Current

Lafarge

€42bn merger between Lafarge and Holcim

2014

Nestlé

€6.0bn disposal to L’Oréal of an 8.0% stake in

L’Oréal in exchange for 50% stake of Galderma

and €3.4bn in cash

2014

Discovery Communications

Acquisition of a 51% controlling interest in Eurosport from TF1

Advice on c.US$1.2bn

strategic alliance with TF1

Current

Volkswagen

c.€3.1bn buy-out offer to minorities in the context of the domination and profit

and loss transfer agreement with MAN

2013

Atlantia

€25bn merger with Gemina

2013

Comverse

Rothschild advised Comverse Technology on $1.9bn merger with Verint

Systems

Fairness opinion to the Board of Directors on the €10.7bn capital increase

2013

Bankia

2013

Joh. A. Benckiser

$9.8 billion acquisition of D.E. Master Blenders

1753 by Joh. A. Benckiser

Advising American Airlines on its $26bn

merger with US Airways and

$3.3bn exit financing 2013

American Airlines

€8.6bn sale of E-Plus by KPN to Telefonica

Germany and Telefonica S.A.

2013

KPN

2013

Salini

€ 1.7bn merger with Impregilo S.p.A

$3.8bn merger with Jefferies Group

2013

Leucadia National Corporation

2013

Vinci Concessions

€3.1bn acquisition of a 95% stake in ANA

Aeroportos de Portugal

2012

Oi

$15bn shareholding reorganization

2013

Sprint Nextel

$22bn sale of a 78% stake to SoftBank and

evaluation of unsolicited Dish proposal

2012

RobertBosch

$1.2bn acquisition of SPX Service Solutions

2012

Volkswagen

Financial advisor in the context of its stake

increase in MAN SE from 56% to 75%

2013

Intel Corporation

Strategic advisor regarding various

situations being reviewed by the Board

2014

Essilor

$1.9bn acquisition of a 51% stake in Transitions Optical and of 100% of

Intercast from PPG Industries

Current

Level 3 Communications

US$7.3bn acquisition of tw telecom

Current

Alstom

Financial advisor to Alstom on a €12.35bn

proposed acquisition of its Energy Activities by

General Electric

2014

Westfield

Adviser on the separation of its US$18bn

international business and simultaneous A$29bn

merger of its Australian/NZ business with Westfield

Retail Trust

Current

Santander

US$6.6bn voluntary exchange tender offer by

Santander

Current

Alibaba

Equity advisor on U.S. listed IPO


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2. Rothschild Healthcare

2.1 A leading Healthcare M&A advisor worldwide Rothschild Healthcare was #1 in Europe and #2 globally in 2013

Over 25 deals announced worldwide in 2013 and over 20 announced 2014 YTD We do more deals in Europe than any of our competitors consistently ─ c.300 deals in

the last 8 years

High deal volume

Ranked by no. of completed deals 2013 Source Thompson Reuters 2014

Ranked by no. of completed deals 2013 Source Thompson Reuters 2014

Rothschild has been active in a number of recent transactions in the Life Science sector either from a sell or buy-side perspective

Strong track record across the board

Track record of execution and transaction completion Reputation for, and experience of, handling complex cross border deals Sell side and defence are at the core of our expertise

Unparalleled execution ability

Sector expertise, global coverage, local execution A core team of 27 specialists in London

– Significant resources ─ largest team in Europe

Access to all of the key market players

Currently advising on a number of healthcare transactions worldwide Our volume allows us to pick up the key trends

Highly active with excellent insight into healthcare M&A trends

Leading advisor for Healthcare Strong deal flow Selected recent deals across the board

2014

Actavis, Inc.

Advised on disposal of Actavis’ Western

European commercial operations

2013

Apotex / Chiesi / Zambon

Disposal of Doc Generici to Charterhouse Capital

Partners

2013

CBPE Capital

£180m disposal of Rosemont

Pharmaceuticals to the Perrigo Company

# European Healthcare M&A US$bn No.

1 Rothschild 6.0 222 BNP Paribas 2.2 63 Goldman Sachs 12.0 54 Credit Suisse 2.6 55 Citi 8.9 46 Deutsche Bank 6.9 47 J.P. Morgan 10.6 38 Perella Weinberg 4.4 29 Centerview Partners 3.1 2

10 Credit Agricole 2.3 2

# Global Healthcare M&A US$bn No.

1 Goldman Sachs 75.5 372 Rothschild 7.4 273 Morgan Stanley 39.3 264 J.P. Morgan 38.1 265 BAML 54.1 216 Jefferies 9.8 217 Credit Suisse 17.8 198 Citi 17.5 189 Barclays 10.1 17

10 Deutsche Bank 20.1 14

Sauflon Pharmaceuticals Ltd.

Advised on the sale of Sauflon to the Cooper Companies for $1.2bn

2014

2014

Meda

€2.3bn acquisition of Rottapharm | Madaus

2014

Almirall

Almirall’s US$2.1bn plus royalties respiratory

transaction with AstraZeneca

2014

Nestle

€6.0bn disposal by Nestlé to L'Oréal of a 8.0% stake in L'Oréal in exchange for

50% of Galderma and €3.4bn in cash

2014

Abbott

Acquisition of LLC Garden Hills, the parent company of OJSC Veropharm for

$631m

2013

Syntaxin

Disposal to Ipsen for consideration of €28m up

front and €130m of potential development and

commercial milestones

2014

MediWound

Advised on $81 million IPO on the Nasdaq

2014

Vectura

€130m acquisition of Activaero

2014

Medreich

Sale of Medreich to Meiji Seika Pharma for

US$290m


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A global network of over 70 bankers with 27 specialists in London

Facing Page 8

Brazil Luiz Muniz Gustavo Saito Leticia Villa-Forte Andre Carpinetti

France

Olivier Pécoux Laurent Buiatti Thierry Latran Cyrille Harfouche Robert Rozemulder

Germany Martin Suter Stefan Meine

Spain

Manuel Menduina

Italy Nicola Paini Stefano Beschi Francesco Bertocchini

Singapore Singapore

Rohit Elhence Teck Tan

Russia James Friel Giovanni Salvetti Pierre Bouygues

China Jennifer Yu Kelvin Chau Eddie Zhou

CEE

William Wells Jacek Chwedoruk Anna Wiland

Australia Australia

Colin Richardson Sam Prentice Marcus Wyborn

Japan

Keiichi Mitake Jerome Finck Ryo Eto

India India

Sanjay Bhandarkar Anup Kapadia Subhakanta Bal

US Jim Lawrence Robert Bicknese Geoffrey Blythe Matthew Sperling Nicholas Barnes Robert Berger

Canada

David Drinkwater David Savard

Turkey Dr. Yılmaz Argüden Luc Hanon Bariscan Atakan Faik Tuna Yagci Marc Aytac

Greece

Nassos Zambaras Dimitrios Iroidis

China

South Africa

Paul Bondi

Israel

Doron Gurevitz

UK

Dominic Hollamby Hedley Goldberg Stefano Beschi Julian Hudson Isambard Corbett Karim Mattar Carlos Santos Dimitrios Iroidis Sebastian Koeroemi Chris Whittaker Miles Davies Thibault Poirier Rodrigo A. de Toledo Ashley Southcott Kai Roettgers Yon Jan Low Jay Manchi Milosz Tutak Luke Poloniecki Alexandre Fauron Hishaam Junaideen Josh Johnson Thomas Bryan Ruben Moses Dipesh Mahtani Ravi Shah Lora Grigorova


http://images.google.co.uk/imgres?imgurl=http://www.essex.ac.uk/armedcon/images/country/headings/flags/turkey_flag_large.bmp&imgrefurl=http://www.essex.ac.uk/armedcon/world/europe/south_east_europe/turkey/default.html&h=401&w=602&sz=709&hl=en&start=3&um=1&tbnid=PftEdVawZB1IIM:&tbnh=90&tbnw=135&prev=/images?q=turkey&svnum=10&um=1&hl=en&rls=GFRG,GFRG:2007-16,GFRG:en-GB&sa=N

2.2 Rothschild Healthcare Large, dedicated and experienced Healthcare team in London

Director

Karim Mattar

Director

Isambard Corbett

Managing Director

Stefano Beschi

Analyst

Alexandre Fauron

Analyst

Hishaam Junaideen

Associate

Rodrigo Alvarez De Toledo Ashley Southcott

Associate

Global Head of Healthcare

Dominic Hollamby

Analyst

Thomas Bryan

Managing Director

Hedley Goldberg

Managing Director

Julian Hudson

Assistant Director

Dimitrios Iroidis

Assistant Director

Sebastian Koeroemi Miles Davies

Assistant Director Assistant Director

Chris Whittaker

Associate

Thibault Poirier

Yon Jan Low

Associate

Director

Carlos Santos

Kai Roettgers

Associate

Analyst

Luke Poloniecki

Analyst

Ruben Moses

Analyst

Ravi Shah

Analyst

Dipesh Mahtani

Analyst

Lora Grigorova

Analyst

Josh Johnson

Milosz Tutak

Associate

Jay Manchi

Associate


8

3. Selected recent case studies

3.1 €2.3bn acquisition of Rottapharm | Madaus by Meda

Rothschild was the only M&A bank involved in the largest ever healthcare acquisition in Italy

Transaction terms Transaction rationale

The transaction values Rottapharm│Madaus (”Rottapharm”) at an enterprise value of €2.275bn including a non-contingent deferred payment

This includes net debt of c.€300m implying an equity value of €1.975bn

The consideration will be: – €1.643bn in cash – 30m Meda shares corresponding to a value €357m and 9%

ownership of Meda – €275m non-contingent deferred payment in Jan 2017

Transformational transaction Creates a leading European specialty pharma group with >

SEK 18bn in sales Increases revenue profile and sustainability Adds a portfolio of strong consumer healthcare brands

Meda pro forma ~60% Rx / ~40% Cx / OTC Expands presence in Emerging Markets Increases Emerging Markets scale by 50% leading to sales

of SEK 3bn Substantial synergies expected Approximately SEK 900m per annum run-rate with full

effect in 2016 Accretive to EPS and cash EPS Expected to be in excess of 20% after full integration in

2016 Strong combined cash flow generation Expected to deleverage to current levels (net debt /

EBITDA) in 2016

Rothschild value add

Completing a thorough analysis of potential targets across the European specialty pharmaceutical space which yielded the identification of Rottapharm as the most suitable acquisition target for Meda

Prepared indicative combination analysis that was used throughout for the provision of tactical advice

Use of Rothschild’s long-term and strong relationships with both parties to facilitate the agreement of a transaction

Leveraged insight of potential interlopers Actively supported Meda during the due diligence process Drafted key materials for Meda’s Board of Directors and media

1

2

3

4

5

6

2014

Meda


Almirall / AZ

Actavis / Aurobindo

Abbott / Veropharm

Meda / Rottapharm

Case Study


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13.1

5.1

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0>18

2.0

1.0

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

>3

3.7

1.4

0.9

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Run-rateSynergies

6.028%

33%


Enhanced scale, reach and profitability

Scale Reach Profitability

Group Emerging markets Group

Sales 2013 (SEKbn) EBITDA 2013 (SEKbn) Sales 2013 (SEKbn)

Almirall / AZ

Actavis / Aurobindo

Abbott / Veropharm

Meda / Rottapharm

Case Study


11


Standalone Combined

Increased consumer healthcare presence

Rx

~ 60% of sales

Cx / OTC

~ 40% of sales

Rx25%

Cx / OTC75%

Sales 2013

Cx dynamics Rx

75%

Cx / OTC25%

Sales 2013

Branded products

Free pricing

Consumer out-of-pocket

Limited generic competition

Almirall / AZ

Actavis / Aurobindo

Abbott / Veropharm

Meda / Rottapharm

Case Study


12


Top 10 product sales (SEKm) Product portfolio

An attractive combined portfolio of specialty products

Additional focus on orthopaedics with Dona, Go-on and other

Diversified portfolio with limited reliance on a single product

Dona5%

Tambocor4% Betadine

4%Dymista

3%Aldara / Zyclara

2%Elidel2%

Saugella2% EpiPen

2%Legalon

2%

Azelastine2%

Other72%

Sales 2013

424 288

449 290

753 386

810 415

776 400

(Dona)

(Saugella)

(Azelastine)

(Legalon)

(Betadine)

Represents Rottapharm products

Almirall / AZ

Actavis / Aurobindo

Abbott / Veropharm

Meda / Rottapharm

Case Study


13

http://www.count2.co.nz/training.aspx

http://www.wynnpharm.com/dona/news/news3.html

http://www.webmd.com/drugs/drug-7745-azelastine+nasal.aspx?drugid=7745&drugname=azelastine+nasal&pagenumber=2

http://www.dooyoo.de/homoeopathie/rottapharm-legalon-156-mg-hartkapseln-60-st/

3.5 Almirall’s $2.1bn strategic respiratory collaboration with AstraZeneca

A complex transaction perimeter and consideration structure

Key transaction terms Transaction rationale

Total consideration in the form of upfront payment of $875m and up to $1.22bn in development, launch and sales-related milestones plus royalties and profit share structure

For Aclidinium, Almirall’s leading product, AstraZeneca will assume development and commercial obligations; Almirall will continue to manufacture the product for a fixed period of years

AZ assumes the development and commercialisation obligations for the LABA and MABA pipeline products – Almirall to receive development milestones based on a

“pooling of assets” concept that provide protection against asset selection

Sale of respiratory research facility Almirall Sofotec including all related IP and Genuair device

Discovery collaboration based on Almirall’s pre-clinical candidates

Value maximising terms AZ better able to maximise commercial potential of

portfolio given infrastructure and development capabilities Partnering with a well established player AZ is a leading Respiratory player with a track record for

developing and selling respiratory products Benefits of broader portfolio Complementary portfolios are expected to offer a broader

range of therapeutic solutions for Respiratory patients Strategic evolution Provides Almirall with the resources to focus on becoming

a leading global dermatology player Increases shareholder value Maximizes shareholder return and value of Almirall’s

assets and is accretive to EPS in 2014 and beyond Derisking of portfolio Consideration structure negotiated to provide Almirall with

cash immediately whilst allowing it to benefit from future upside of products

Transaction perimeter

1

2

3

4

5






European commerdsdsds


European commercial operationsADvised on the

2014

Almirall

Advised on the US$2.1bn plus royalties respiratory


Discovery collaboration

Sofotec and Genuair ®

AB franchise

Clinical Assets

AB non-partnered

and partnered

LABA

MABA Equity sale Preclinical

A number of Almirall employees from Respiratory including Almirall Sofotec employees will be transferred to Astra Zeneca

6

Almirall / AZ

Actavis / Aurobindo

Abbott / Veropharm

Meda / Rottapharm

Case Study


14

Strategic and tactical advice through deal negotiation and execution including approach to alternatives bidders

Negotiated the scope and perimeter of the transaction Led the negotiations with AstraZeneca Designed the structure of the terms which consisted of a cash upfront, launch and

development milestones and royalties Negotiated the binding agreement over three weeks alongside CMS Assisted the legal team in editing / drafting of multiple contracts, and commented on all legal

documents Sole financial advisor

3.6 Almirall’s $2.1bn strategic respiratory collaboration with AstraZeneca

Rothschild strategic value add

Coordinated the due diligence in only three weeks, compressing the due diligence period with full suite Q&A

Created transaction VDRs and managed them throughout – sorting, tailoring and updating on a daily basis

Organised bi-weekly and supplementary due diligence calls and site visits

Worked side by side with company producing product operating models for integration into complex, multi-indication, fully-flexible licensing models

Assisted in preparing all presentations including – Board papers and valuation materials – Counterproposals – Equity analyst presentation

Coordinated communications and calls between Almirall and AstraZeneca Created and managed the project timetable and coordinated the key workstreams, including

those of third parties such as lawyers and accountants Ensured no leak in a deal involving two public companies Advised on all aspects of the deal including debt covenants, Spanish stock exchange and

accounting requirements Parallel preparation of a full sell-side process to create competitive tension

Negotiations

Diligence

Modelling and presentations

Process management

Almirall / AZ

Actavis / Aurobindo

Abbott / Veropharm

Meda / Rottapharm

Case Study


15

Crossbow overview: Actavis’ commercial operations within seven Western European countries

Facing Page 16

Infrastructure supports operations and products in five segments: generics, hospital, prescription, tender and OTC

~1,2002 products Pipeline portfolio of 200+ products Former Roche Rx branded product

portfolio, including rights to market authorisations

Renowned “Arrow Génériques” brand in France

FRA ITA ESP POR GER NED BEL Total

Office location Lyon Milan Madrid Lisbon Munich Baarn Baarn3

# FTE 172 49 101 35 65 55 3 480

Market position1 7th 8th 10th 10th 6th 3rd 9th

Net sales €m (13E) 142.1 26.9 28.0 14.0 71.0 36.1 3.8 321.8

% Total sales 44% 8% 9% 5% 22% 11% 1%

# Products2 395 137 96 128 192 236 14 c.1,200

A pan-European pharmaceutical infrastructure

Product portfolio

Source IMS data, Company information Notes 1 Based on Generics / Generics Tender market segments 2 Some product overlap on a country-by-country basis by INN 3 Shared office with Netherlands

Sales split by channel (2013E) Net sales development (€m) Operations (FTE)

Total: 480 FTE Total:€321.8m

OTC2%

Generics48%

Generics Tender16%

Prescription9%

Hospital25%

G&A23%

Reg11%

S&M56%

Other 10%

0

100

200

300

400

2012A 2013E 2014F 2015F


3.7 Disposal of Actavis’ Western European commercial operations (“Crossbow”) to Aurobindo

Transaction overview

June 2013

July 2013

Aug 2013

Jan 2014

Actavis decided to divest Crossbow in order to focus on higher margin specialty products

Transaction summary

Disposal of Actavis’ Western European commercial operations in 7 countries: France, Germany, Spain, Portugal, Italy, Belgium and the Netherlands (together “Crossbow”)

Operations include: Gx business (including tender business in Germany and the Netherlands), Hospital business and Rx / OTC products

Infrastructure includes: approximately 480 employees across sales and marketing, regulatory and quality as well as over 100 G&A FTEs

Actavis will retain the B2B business (Medis/Specifar) and manufacturing plants

The structure of the deal involved the combination of 4 share and 2 asset deals (Italy and Portugal)

Actavis will be a key supplier to Aurobindo for Actavis manufactured products for up to 5 years and given the complexity of the carve out will be supportive to Aurobindo in transferring the business and assets during the transition period

Extensive transitional services, license, supply and distribution agreements agreed as part of the transaction

Rothschild appointed as sole financial adviser

Development of the equity story, market positioning of investment case and preparation of business plan for sale

Oct 2013

Initial investor education; international trade / PEH auction commenced – Leveraged the global Rothschild network – Over 80 parties were contacted / reviewed the

opportunity Vendor due diligence and separation plan Support and coordination of work streams between

local management teams, Actavis Group and other advisors to prepare stand-alone information memorandum

Nov 2013 Second round binding offers received

– Advice on tactics – Extensive legal documentation, supply and

transitional agreements negotiated 17 Jan: Transaction announced

– Maintaining competitive tension until the very final phase of negotiation

Non binding offers received

– Competitive tension and value maximisation – Diligence and management presented to

selected bidders

Rothschild’s role

Sole financial advisor to Actavis

Leveraged the Rothschild global healthcare network to conduct an international marketing effort with potential strategic buyers and financial investors

Maintained competitive tension and momentum throughout the sale process despite the complexity of the carve-out, the financial profile of the business and the level of transitional and supply arrangements required

2014

Actavis, Inc.



“Represents progress for the company as it executes its long-term plan. Possessed little strategic value in the near term” Source Barclays 21/01/2014 (Actavis)

“Acquisition makes sense as establishing this kind of infrastructure and front-end presence on its own would have taken several years in four key markets and accelerating its entry into France, Belgium and Italy” Source Edelweiss 21/01/2014 (Aurobindo)

Almirall / AZ

Actavis / Aurobindo

Abbott / Veropharm

Meda / Rottapharm

Case Study


16

3.8 Abbott / Veropharm Rothschild acted as sole financial advisor to Abbott on its proposed US$631m acquisition of Veropharm

Transaction background Key issues

Background and Veropharm overview In August 2013, Mr. Roman Avdeev acquired a 52% stake in

Veropharm (the “Company”) from Pharmacy Chain 36.6 for RUB 5bn (c.US$ 151m)

Veropharm is one of the largest pharmaceutical producers in Russia focused on generic prescription drugs. In 2013, the Company generated sales of US$165m and EBITDA of US$37m

After its unsuccessful attempt to acquire Petrovax Pharm (a Russian vaccine manufacturer), Abbott identified the Company as the most suitable alternative acquisition target in Russia

Process overview Abbott managed to secure quickly an exclusive discussion with Mr.

Avdeev regarding the acquisition of Veropharm The process was kept extremely confidential given the ongoing

public offer on Veropharm minorities Extensive due diligence took place between the exclusivity

agreement signature and the final documentation Deal completion The acquisition of Veropharm will allow Abbott to enter the top-5

pharmaceutical players in Russia, adding new and complementary products to its global portfolio and providing it with a modern local manufacturing base

The signing took place on 23 June 2014. Deal completion is subject to Russian regulatory approvals (Anti-trust and Strategic Committee for Foreign Investments) and other customary conditions

Current

Abbott Laboratories

Advisor to Abbott Laboratories on its

US$631m acquisition of Veropharm

The deal represents the largest M&A transaction in the Russian healthcare industry to date and one of the largest and most significant acquisitions of a Russian business by a US company

Timeline

2013

Aug August 2013: Mr Avdeev acquired a 52% stake in Veropharm from Pharmacy Chain 36.6

Sep-

Oct

September 2013: Abbott identified Veropharm as the most suitable acquisition target in Russia for Abbott Rothschild advised on tactics and arranged initial meeting with MCB Capital (Mr. Avdeev’s investment vehicle)

Nov November 2013: Mr Avdeev launched a mandatory offer for the c.48% public minority in Veropharm

Jan November 2013 - February 2014: Due diligence under exclusivity

Feb February 2014: As a result of mandatory offer, MCB Capital consolidated more than 95% in Veropharm

Jun February - June 2014: SPA negotiations. Preparation of filing documents

23 June 2014: Signing of the binding documentation

2014

Deal metrics, US$m

EV 631

Net debt 136

Equity value 495

Almirall / AZ

Actavis / Aurobindo

Abbott / Veropharm

Meda / Rottapharm

Case Study


17

Recent transactions with specialty pharma

Facing Page 18

Vectura

Klox Keycyt

Syntaxin BTG

BTG

Target VC backed, company based in

Germany that employs a

proprietary smart nebulisation-

based technology allowing for

targeting of drugs into areas of

the lung via inhalation

Development and

commercialization of non-

invasive BioPhotonic

technology using a device

consisting of LEDs that

interact with oxygen-rich gel

UK-based private life sciences

company specialised in

botulinum toxin engineering

supported by an extensive

patent portfolio (75 granted

and over 132 pending)

High growth profitable

business that is focused on

utilising Therasphere® for

targeted interventional

treatment of liver cancer

US based firm that sells

EkoSonic Endovascular

System, an interventional

product using a locoregional

approach in the treatment of

severe blood clots

Acquirer UK-listed product

development company that

focuses on the development of

pharmaceutical therapies for

the treatment of airways-

related diseases

Denmark based developer

and producer of

pharmaceuticals focusing on

dermatology

Global specialty

pharmaceutical company with

total sales exceeding €1.2

billion in 2012

Specialist healthcare company focused on three business areas: Interventional Medicine, Specialty Pharmaceuticals, and Licensing & Biotechnology

Specialist healthcare company focused on three business areas: Interventional Medicine, Specialty Pharmaceuticals, and Licensing & Biotechnology

Pricing

€130m

Not disclosed €28m upfront, contingent

payments of up to €130m

c.£133m

Initial consideration of £120m,

future milestones of £27m

Rationale Acquisition is highly

complementary to Vectura,

and fulfils key strategic

priorities, including diversified

income streams, smart

nebuliser-based technology, a

balanced pipeline and an

enhanced growth profile

Leo Pharma gains access to

its first medical device therapy

and first global market entry in

acne

Strengthens Ipsen’s neurology

R&D capabilities and fits

strategy to reinforce its core

technological platforms,

peptides and toxins

Nordion’s Targeted Therapies division complements the existing Oncology Beads product range

EKOS will complement their

existing vascular interventional

medicine business and will

have callpoint synergy with

their Varisolve product

2013

BTG PLC

£133m acquisition of Targeted

Therapies division of Nordion

Incorporated

2013

Syntaxin

Disposal to Ipsen for consideration of €28m up front and €130m of potential

milestones

2014

Vectura


2013

BTG PLC

£147m acquisition of EKOS

Corporation

2014

KLOX Technologies

Joint venture with Leo Pharma in dermatology


3.9 Case study summaries Recent transactions with the big pharma

m

Target Switzerland based pharmaceutical company involved in the manufacturing and marketing of drugs and personal care products

Pfizer Nutrition develops nutritional products that are scientifically designed to help meet the needs of infants and young children, as well as pregnant and lactating mothers

Pfizer Nutrition (US) develops premium-quality nutritional products to help meet the needs of infants and young children, as well as pregnant and lactating mothers

US based dermatology-focused pharmaceutical company

Acquirer France based company engaged in the nutrition, health and wellness business

South African listed company offering a range of branded, generic and OTC medicines as well as consumer and nutritional products

Nestlé SA is a nutrition, health and

wellness company

Focus on prepared milk-based products, pharmaceuticals and ophthalmic goods, baby foods and cereals

Switzerland based provider of pharmaceutical products

Financials / Pricing

€6.0bn in exchange for:

- 50% stake in Galderma for €2.6bn

- €3.4bn cash consideration

na

$11.85bn

$1.5bn

Rationale The deal is part of Nestle’s strategic development in Nutrition, Health and Wellness by expanding its activities in medical skin treatments

Regulator required Nestlé to divest

Pfizer Nutrition’s infant nutrition activities in Australia, South Africa, and part of Latin America

Pfizer Nutrition is a dynamic, high

quality, infant nutrition business that complements Nestlé’s existing portfolio with strong brands in key segments and geographies

Strengths Sandoz’s differentiated

products strategy by complementing

its existing global leadership positions

in biosimilars and generic injectables,

anti-infectives, and ophthalmics

2012

Disposal of Fougera

Pharmaceuticals to Novartis (Sandoz)

2012

Nestlé’s acquisition of

Pfizer Nutrition for $11.85bn

2014

€6.0bn disposal to L’Oréal of an 8.0% stake in L’Oréal in exchange for 50% stake in Galderma and €3.4bn in cash

2013

Nestlé’s disposal of Pfizer Nutrition Latin America to

Aspen

2013

Nestlé’s disposal of Pfizer Nutrition South Africa and

Australia to Aspen


18

Recent transactions in OTC

Facing Page 19

Target French pharmaceutical laboratory

specialised in the area of

phytotherapy, natural medicine and

dietary supplements

Canada based developer and

manufacturer of innovative, science-

based dietary supplements

Schiff is a dynamic, high quality nutritional supplements and vitamins business with significant growth opportunities and strong, market-leading brands

Natur Produkt, a leading OTC pharmaceutical and food supplement business in Russia

Acquirer Fund of €2.5 billion to invest and

gathers more than €4bn of assets

under management

Invests €100m to €1bn across many

different industry sectors

Chinese, diversified healthcare

company covering pharmaceutical

manufacturing, distribution and retail,

healthcare services and diagnostics

products and medical devices

British consumer goods leader

focused on health, hygiene and home

Major US Healthcare brands include Mucinex, Delsym, Cepacol and Durex

Valeant Pharmaceuticals operates as a multinational pharmaceutical company. It engages in the manufacturing, developing and marketing a broad range of pharmaceutical products


na

na $1.5bn

$185m

Rationale Supplements Montagu’s

pharmaceutical offering in a strong

market

Provides the needed local expertise

and access to a wide range of

distribution channels required to enter

Chinese market

Significantly enhances Reckitt’s

market presence and position in the

United States, the world’s largest

market for over-the-counter (“OTC”)

and nutritional products

The acquisition will enable Valeant

Pharmaceuticals to enhance its

footprint in the over-the-counter

medicine market and strengthen its

position in Russia

2012

$1.5bn sale ($42 per share)

sale of Schiff Nutrition

International to Reckitt

Benckiser

US$185m disposal of Natur Produkt to

Valeant 2012

2014

Disposal of Arkopharma to

Montagu

2013

Establishment of joint venture in

China with Fosun Pharma


3.10 Case study summaries Recent transactions with the generics

Target Medreich is an international contract manufacturing and development and generics company

Established presence across UK,

Europe, Africa and Asia Pacific

Italy based distributor of equivalent medicines

UK based liquid oral drug developer

and manufacturer

Developer and producer of proprietary gelatin-based formulations for OTC, prescription and nutritional products

Acquirer Meiji is a Japanese conglomerate engaged in manufacturing and marketing of dairy products, confectioneries, nutrition and health foods

UK based private equity firm making investments in Western Europe

US-based healthcare and

pharmaceutical company developing

& manufacturing OTC, prescription,

and consumer products and APIs

US-based provider of contract drug development and manufacturing services to pharma and biotechnology companies


$290m

€340m

$282m

$255m

Rationale MSP’s first major transaction outside

Japan and will mark MSP’s entry into

India

Mark’s Charterhouse’s first

transaction in the Italian pharma

market

Expands Perrigo’s international

presence while further enhancing its

manufacturing and research &

development capabilities

Perrigo well positioned to facilitate the

acceleration of Rosemont’s

international product portfolio into

European and US markets

Provides a platform to grow

Patheon’s CMO and PDS businesses

Creates scale opportunities, and adds

a well-balanced product and

intellectual property portfolio

Expands Patheon’s geographical

presence

Current

Medreich

Sale of Medreich to Meiji Seika Pharma

for US$290m

2013


Disposal of DOC Generici to

Charterhouse Capital Partners

2013

CBPE Capital

£180m disposal of Rosemont to

Perrigo

2012

VION

Disposal of Banner Pharmacaps to Patheon


19

4. Rothschild Life Sciences credentials

4.1 Rothschild Life Sciences Significant experience across the globe

Life sciences

2013

BTG PLC

£133m acquisition of Targeted Therapies division of Nordion

Incorporated and £147m acquisition of EKOS

Corporation

2013

Syntaxin

Sale of Syntaxin to Ipsen for up to €160m (€28

upfront) plus structured payments around lead

asset

2013


Disposal of Doc Generici to Charterhouse Capital

Partners

2013

Invent Farma

Disposal of Invent Farma to The Iceland Enterprise

Investment Fund

2013

Atrium Innovations

Establishment of joint venture in China with

Fosun Pharma

2013

Enzymotec Ltd.


2013

CBPE Capital



2013

Kamada

$59m US IPO on the NASDAQ with post deal market capitalisation of

approx. $360m

2013

Advent and Mediq International

Disposal of ACP Pharma to Neuca S.A. and Penta

Investments

2014

Actavis, Inc.



2014

Nestle



2014

MediWound


2014

Vectura


2014

Meda


2014

Almirall



2014

Macrocure

US$54m IPO 2014

KLOX Technologies

Joint venture with Leo Pharma in dermatology

2014

Max Rombi and family

Disposal of Arkopharma to Montagu Private Equity

2014

Keocyt

Disposal of Keocyt to Riemser Pharma

2014

Medreich

Sale of Medreich to Meiji Seika Pharma for

US$290m

2014

LBO Italia

€120m disposal of Corvette to Recipharm


21


2012

Genesis Pharma

Disposal of assets and commercial agreement of biotech products to Amgen

Life sciences (cont’d)

2010

Mepha Holding

US$589.6m disposal of Mepha Group to Cephalon

2010

Refinancing of €750m financial indebtedness

Comifar

2011

Celtic Pharmaceutical Holdings

Disposal of several non-core portfolio

pharmaceutical programmes

2010

Solvay

Strategic review of Pharmaceuticals

division and subsequent €5.2bn disposal to

Abbott Laboratories

2010

BTG PLC

Recommended offer for Biocompatibles

International of £177m

2011

Novagali Pharma

€101m sale of Novagali Pharma to Santen

Pharmaceutical

2011

Fidia Farmaceutici

€200m disposal of 100% of Bioiberica

to Teeuwissen

2011

Polpharma

Acquisition of a majority stake in Khimpharm

2011

Specifar

Disposal of Specifar to Watson Pharmaceuticals

for €400m

2012

BC Partners

Acquisition of Aenova by BC Partners

2012

BC Partners

Acquisition of Temmler Group by Aenova / BC

Partners

2012

Renova Group

US$185m disposal of Natur Produkt to Valeant

2012

Shareholders of Walmark a.s.

Disposal of a 50% stake in Walmark to Mid Europa

Partners

2012

Recordati S.p.A

Acquisition of a portfolio of OTC pharma & dietary

supplements brands from ZAO Akvion

2012

VION N.V

$255m disposal of Banner Pharmacaps to Patheon

2012

Cinven

£465m acquisition of Mercury Pharma from

HgCapital

2012

Nerviano Medical Sciences

Independent strategic review of the group’s

revised business plan as part of their reorganisation

and restructuring

2012

Fougera & Shareholders (Nordic Capital, Avista Capital Partners, DLJ

Merchant Banking)

US$1.525bn disposal of Fougera Pharmaceuticals

to Sandoz (Novartis)

2012

Nestlé SA

US$11.85bn acquisition of Pfizer Nutrition

2012

$1.5bn sale ($42 per share) sale of Schiff

Nutrition International to Reckitt Benckiser

Schiff


22

http://www.solvay.com/

Life sciences (cont’d)

2004

Aventis SA

€59.3bn public offer for Aventis by

Sanofi-Synthelabo SA

2007

Laboratorios Almirall

€376m acquisition of Hermal by Laboratorios

Almirall S.A. from Reckitt Benckiser plc

2005

Advent International

€750m disposal of the Viatris Group to MEDA AB

2005

GlaxoSmithKline plc

US$1.4bn acquisition of ID Biomedical Corporation by

GlaxoSmithKline plc

2006

Schwarz Pharma AG

€4.4bn takeover offer for Schwarz Pharma AG by

UCB SA


2007

Shire plc

Advised on $2.3bn bank financing to support the acquisition of New River

and provide for future working capital needs

2007

Shire plc

US$213m disposal of its non-core product portfolio

to Laboratorios Almirall S.A.

2007

Orphan Europe founders and Quilvest

€135m sale of Orphan Europe to Recordati

2006

Dr Reddy’s Laboratories

€480m acquisition of betapharm from 3i

2007

Polska Grupa Farmecuetyczna

Investment in special purpose company in order to take control of Limedika

and Gintarin Vaistine (Lithuanian distributors of

pharmacueticals)

2008

Genepharm Australasia Limited

Acquisition of Strides Arcolab Limited’s Asian

and Australian businesses by Genepharm Australasia

Limited

2007

Genefar BV

Financial adviser to the shareholders of

Polpharma on its $5.4 billion combination with

Gedeon Richter

2007

Laboratorios Almirall

€697m IPO Adviser to the Company

2008

BTG PLC

£218m recommended offer for Protherics PLC by

BTG PLC

2008

Zentiva NV

Financial advisor to the Board on its defence in

relation to the €2.3bn offer by sanofi-aventis

2009

Intermediate Capital

£975m disposal of Marken to

Apax Partners

2009

Catalent

Disposal of Osny division to Bavaria Industriekapital

AG

2009

Herbacos-bofarma, s.r.o.

€20m disposal of the company to Recordati

S.p.A.

2010

Weider Health & Fitness

US$48.8m sale of 25% stake in Schiff Nutrition International to

TPG Growth

2010

PBM Products

US$808m disposal of PBM Products to Perrigo

2010

Cambridge Laboratories

£17.8m disposal of UK and Irish business to

Alliance Pharma


23

http://www.polpharma.pl/u235/navi/90

http://www.pbmproducts.com/default.aspx

4.4 Rothschild Life Sciences Has advised on a wide variety of transactions...

Cross border Public transactions Financing advisory

2010

BTG PLC

Recommended offer for Biocompatibles

International of £177m

2008

BTG PLC

£218m recommended offer for Protherics PLC by

BTG PLC

2012

$1.5bn sale ($42 per share) sale of Schiff

Nutrition International to Reckitt Benckiser

Schiff

2013

CBPE Capital



2013

Essilor International

$1.9bn acquisition of 51% stake in Transitions Optical and 100% of Intercast Inc

2014

Sauflon Pharmaceuticals Ltd.

Advised on the sale of Sauflon to The Cooper Companies for $1.2bn

2012

Pluristem Therapeutics

$37m common stock offering

2013

BTG PLC

£106m equity placing relating to the acquisitions

of EKOS and Targeted Therapies division of

Nordion

2013

Kamada

$59m US IPO on the NASDAQ with post deal market capitalisation of

approx. $360m

2014

Nestle



2014

MediWound


2014

Macrocure

US$54m IPO

2008

Covidien

£38m recommended cash offer for Tissue Science

Laboratories plc by Covidien UK Holding Ltd

2014

Abbott Laboratories

$631m acquisition of LLC Garden Hills, parent company of OJCS

Veropharm

2014

Almirall



2014

Medreich Limited

Advised on sale of Medreich to Meiji Seika

Pharma Co.

2014

Vectura


2014

Almirall

Debt advice on a €325m 7-year High Yield bond

offering


24

introduction to rothschild healthcare · 2014. 11. 24. · rothschild’s objectivity, its global...

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