Sensing opportunity just below the border, Sabex Inc., a Canadian pharmaceutical maker, was acquired last week by RoundTable Healthcare Partners L.P. in a transaction worth approximately $100 million.
The deal was financed a with mix of equity and debt, though the parties are keeping mum on the specifics. Through the acquisition, Sabex becomes majority-owned by RoundTable, and the pharmaceutical company’s president, Michel Saucier, retains a substantial minority stake, according to the private equity firm. Senior credit facilities were led by GE Capital Healthcare Financial Services, with J.P. Morgan Chase as documentation agent and National City Bank and National Bank of Canada as participants. Subordinated notes were issued to Massachusetts Mutual Life Insurance Company, National City Equity Partners and Banc One Mezzanine Corp. Also as part of the deal, Roundtable’s Jack McGinley, will serve as chairman of the board for Sabex.
As the firm’s second acquisition made through its debut RoundTable Health Care Partners Fund I, Sabex reflects Roundtable’s strategy of management focused investing, said Lester Knight, one of the firm’s founding partners. In fact, Knight stated that RoundTable, which intends to add a new chief operating officer to the company, asked that Saucier remain CEO of Sabex, as part of the deal.
“He’s with the company 22 years, so he knows his market. And we like it when owners retain some equity…it keeps our synergies aligned,” said Knight.
Sabex is primarily a generic injectable pharmaceutical maker with an emerging worldwide operation. Formed in 1980, Sabex deals with small volume injectables, ophthalmics, suppositories and other related products. The company also has an operation that produces generic drugs in the cardiovascular, analgesics, psychotherapeutics, anti-infectives and parenteral nutrition sectors.
The buyout will help harness more resources for Sabex in the U.S. drug market, a focal point of its expansion efforts, which includes sales and marketing efforts and focusing on hospital purchasing organizations.
According to Knight, the injectable pharmaceuticals market is worth $700 million in Canada, and about 10 times more in the U.S. As branded drugs lose their patents, companies like Sabex are poised for growth, said Knight. “There’s billions and billions of dollars in selling more and more generic drugs. And the whole pharmaceutical industry is going to see momentum as more and more drugs are developed and used by baby boomers,” he said.
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