Acquisition Target Search Case Study

Entering China’s pharmaceutical market through M&A

Our client, a leading North American pharmaceuticals company, wanted to increase sales in China and obtain low cost production capacity to supply other markets.

During a 10-week project, we screened hundreds of targets and finally identified and introduced our client to the companies that best fit their acquisition criteria and strategies objectives.

Situation
  • North American pharmaceuticals company with sales in 150+ countries
  • Already active in China with a general pharmaceutical sales office and an API joint venture
  • Client wanted to acquire an advanced Chinese player with an existing product portfolio and sales network in order to:
    • Increase sales in China
    • Lower global production cost
Approach
We developed specific search criteria based on the client’s strategy and objectives.
‘Must-have’ have criteria included:
  • Domestic sales presence in high volume prescription and OTC products (excluding TCM)
  • Minimum of 10 products marketed
  • Marketing/product portfolio focus on therapeutic classes of interest to the Client (‘Top 100 Molecules’ in 24 therapeutic classes)
  • A GMP compliant facility with good quality control
‘Nice-to-have’ criteria included:
  • Some R&D capability (experience in developing & registering its own products)
  • A modern facility that could be made approvable in other Tier 1 markets with additional investment, i.e. US FDA
  • A good pool of skilled workers to draw from in the surrounding area.
  • A tax efficient location
We identified and screened all companies matching the search criteria (see illustration for details)

Result

We short-listed 34 companies. Based on interviews with management, discussions with industry experts along the value chain, and desk research we identified 15 high priority targets. The client ended up forming a manufacturing joint venture with one of the companies.

To discuss how we can help you organization please  Per Stenvall (email).

 

Learn more about how we support companies and private equity investors in China’s  healthcare industry: