Portfolio company
Glenmark Pharmaceuticals |  |
|---|
Company website | www.glenmarkpharma.com |
Business sector | Consumer |
Country of operation | India |
Market | South Asia |
Investment status | Realised portfolio |
Investment type | Growth capital |
Date of original investment | 2002 |
Date of exit | 2006 |
Exit method | Secondary |
Office | Mumbai, India |
Background
Glenmark is a leading mid-sized Indian listed pharmaceutical company with a presence in the domestic market for branded generic formulations and in foreign markets, including the US. It was also working on analogue research for new drug discoveries.High levels of chemistry expertise and the advantages of low manufacturing and research and development costs have contributed to India becoming a major player in the global pharmaceuticals industry. India's domestic pharmaceutical industry is estimated to be worth US$4 billion per year. Following the US, India has the highest number of USFDA approved manufacturing facilities and the highest number of drug master files (DMFs) in the world.
Their needs
By 2002 Glenmark was firmly established as one of India's leading pharmaceutical companies and the management team had ambitious plans to extend its presence in the domestic market as well as build on its success in the global marketplace, particularly in the US and Europe.While the highly experienced management team could see the potential opportunity in exporting generics to overseas regulated markets, they also recognised that it was a long term development strategy. Glenmark needed additional finance to fund the ambitious expansion plans and they also needed a finance partner who could take a long term view of the business and support them through its development.
Our solution
Actis had identified the potential of the pharmaceutical sector due to India's large and growing domestic market, and had short-listed Glenmark as a potentially attractive investment target because of its outstanding management team with an appetite for growth and an ambitious plan to build on their existing success. When the company was looking to raise funds for investment in research and a US generics strategy, Actis was able to react fast and offer a term sheet. Actis's thorough understanding of the sector and Glenmark's business model gave it an edge in obtaining a lead position in closing this investment.Actis's added value
Actis worked closely alongside Glenmark's management team to support the company as it forged ahead in its mission to become truly global pharmaceuticals company.Early in our relationship with Glenmark we worked with the management team to refine the multi-part development strategy and plans for delivery. The business is now structured with four distinct business units focused on domestic products, international products for export, advanced pharmaceutical ingredients and research and development.
Glenmark shares our commitment to promoting best practice. Actis's ESG team visited several Glenmark manufacturing facilities and provided recommendations which were implemented and resulted in significant ESG improvements. We also helped the business define a world-class health and safety policy which Glenmark has implemented. Following Glenmark's acquisition of a bulk drug facility in Gujarat from GlaxoSmithKline, a key priority was to ensure that the facility was USFDA compliant.
Actis has advised Glenmark on improving management information systems and to strengthen the Board through widening the skill base in areas including law, international investments and banking.
Actis also advised on a stock market liquidity programme to help enhance Glenmark's market value.
The exit was achieved in stages between September 2003 and October 2006 by selling shares to institutional investors in block trades on the stock exchange.
A strategic sale was not an option given Actis's minority stake in this quoted company; therefore, the natural route to exit was through the secondary market. Actis decided to sell in stages, in order to benefit from new developments which would lead to increasing buying interest from foreign institutional investors.