Macarthy Group Limited

Activity
Generic pharmaceuticals
Acquired
Aug 1997
Realised
Nov 2000
Sector
Healthcare

Business
In August 1997, Cinven led the buyout of Macarthy from the German pharmaceutical wholesaler, Gehe. Gehe had recently purchased Macarthy as part of its acquisition of Lloyds Chemists, and Macarthy was non-core to the enlarged entity.

Macarthy was a manufacturer of specialist generic pharmaceuticals. Its focus was on securing strong market positions with high margins by developing new presentations of off-patent generic pharmaceuticals. The business operated over four principal product sectors: parenterals, methadone, opthalmics and specials, enjoying a leading market position in each area. The company operated mainly in the UK with a small but fast-growing export business. The main customers were hospitals and approximately 10,500 community pharmacies.

Strategy
Cinven’s strategy for the business at the time of acquisition was to grow the business both organically and through acquisition. During the course of the investment a number of profitable niche products were acquired from large pharmaceutical companies to complement the company’s product range.

Outcome
The £12 million acquisition of Aurum in 1999 provided the company with a strong in-house new product development capability together with an excellent pipeline of new products. This growth led to a requirement for greater production capacity and new premises, with 50% more space, were opened in 2000.

The company was sold to Intercare, a strategic buyer, in November 2000.

Multiple returned on investment: 2x