In its first acquisition in Latin America in more than a year, JPMorgan Partners has bought out family-run Mexican pharmaceuticals distributor Casa Marzam for an undisclosed amount. (Typical JPMorgan Partners investments are between $25 million and $75 million.)
A company spokesperson described the deal as “a vote of confidence” for the recently made investment-grade country. To date, JPMorgan Partners has invested 18% of its Latin America fund, with 35% going to Mexico. The fund closed two years ago July. JPMP also has another pharmaceuticals distribution company in Drogasil, a Brazilian pharmaceutical and beauty products retailer.
“We looked at many opportunities over the last year but didn’t feel as enthusiastic about them as we do about this one,” said Robert Velarde, a principal with JPMorgan Partners.
Casa Marzam is the third largest wholesale distributor of pharmaceutical products in Mexico with annual sales of $700 million. JPMP believes its investment gives Casa Marzam a leading competitive position. Based out of Mexico City, 60-year-old Casa Marzam distributes not only to pharmacies, but also to mass merchants and supermarkets throughout the country.
“This [deal] is an example of a transaction that is smack dab in the middle of the strategy of JPMP. We’ve found a group of proven managers that we’ve backed in this buyout and in an area and in an industry where we see both historical and prospective growth being attractive,” said Velarde, adding that the transaction confirms his firm’s committment to Latin America and Mexico. Ernesto Moya will remain chairman of Casa Marzam.
JPMP brought its life sciences team in on the deal to conduct due diligence on the pharmaceuticals end and its industrial team to deal with packaging, distribution and manufacturing.
Going forward, JPMP views its participation in the formerly family-owned business as a continuation “of making the company professional by having a professional management team and investors; and really just participating in the growth opportunities of the industry,” said Velarde. “Otherwise, any moves depend on what the strategic rationale is.”