betapharm, a German pharmaceutical company owned by 3i, has been acquired by India’s Dr Reddy’s Laboratories in a €480m deal. The fourth largest generics company in Germany, 3i first invested €110m in the company in March 2004 as it spun-out from Hexal, the German drugs maker. At the time it was a sales and marketing subsidiary owned by Andreas and Thomas Strengmann. 3i partner Bernie Schuler, who led the investment and the exit, said: “This was a principal to principal deal where I spent a considerable amount of time talking to the Strengmann family. In a deal of this kind you have to build up rapport with the owners because they are not familiar with the world of private equity and do not make decisions based solely on financial rationale. We were able to build a relationship based on trust and proceed on that basis.”
3i changed the orientation of the business and brought in Thomas Nedtwig as CFO, a member of 3i’s People Programme, who set about establishing a finance department from scratch and installed SAP, an enterprise resource management software solution. 3i also introduced Dr Wolfgang Niedermaier as CEO to replace the retiring Peter Walter. 3i partner Schuler sat on the board of betapharm as a non-executive director and helped the business establish a pipeline of products, and set up a number of partnerships with drug companies, many of which are located in Asia.