In 2007, the Apax team proactively identified
a proprietary opportunity to invest in Qualitest Pharmaceuticals, a
private, family owned company based in Alabama, USA. Qualitest is a
speciality generics player with a focus on controlled substances
and liquid pharmaceuticals. Apax Partners utilised its deep sector
knowledge to determine that despite an increasing focus on size and
scale in the generic pharmaceuticals industry, specialised niche
players such as Qualitest could be exceptionally successful as
well. Further, due to its highly efficient manufacturing
operations, Qualitest is able to produce very affordable medication
despite being based in the domestic US.
The generic pharmaceuticals industry is highly regulated. Safety
and quality are of the utmost importance. In order to ensure that
the business engages the latest best practices and that its
manufacturing capabilities maximise efficiency and safety, Apax
provided Qualitest with access to a number of highly experienced
industry consultants during its period of ownership. In addition,
Apax invested significant capital into the facilities to enhance
their performance.
One important area of value creation that Apax identified early
on was the professionalisation of management and systems. To this
end, Apax partnered with Marvin Samson, the former CEO of Sicor and
previously on the executive committee of Teva, the leading global
generic pharmaceutical company. Marvin joined Qualitest as Chairman
when Apax completed the deal. With his extensive experience in
generic pharmaceuticals, Marvin has been able to guide the Company
in growing both the top- and bottom-line.
Apax further strengthened the management team by complementing
the existing leadership with a new President and important VP
positions, which were filled with high calibre individuals. With
the new team, Apax and Marvin have been working to improve sales,
operations and planning, drive improved key performance indicators
and increase coordination amongst the various functional areas.
"Since joining Qualitest as Chairman
& CEO, one of my key areas of focus has been enhancing
Qualitest's existing management team. We now have a highly talented
and motivated team who will continue to build Qualitest and execute
on the Company's growth initiatives."
Marvin Samson, Chairman & CEO of
Qualitest
With its improved manufacturing and capable management team,
Qualitest is now poised to accelerate its growth. The business is
actively looking to further invest in its pipeline, through both
internal developments and externally generated BD
opportunities.
"Qualitest is now 5th in the US market
for generic pharmaceuticals, up from 7th when Apax acquired the
business - in a large part this growth has been due to the quality
of the management team we have built, the improvements to the
business they have overseen and the support of all of our
stakeholders, especially Apax."
Marvin Samson, Chairman & CEO of
Qualitest
Apax Partners used its strong sector
expertise to proactively identify a unique opportunity within an
attractive industry. By professionalising the management team and
enhancing its manufacturing, Apax has been able to add considerable
value to this leading healthcare business.
In September 2010, Endo Pharmaceuticals entered into a
definitive agreement to acquire Qualitest Pharmaceuticals for
approximately $1.2 billion in cash.
Buddy Gumina, Partner and Co-Head of Global Healthcare at Apax,
said, "We have been proud to work with the management team at
Qualitest Pharmaceuticals over the past three years as they have
built one of the leading generics businesses in the U.S. by
supplying high-quality, cost-effective pharmaceuticals.
Qualitest, and now Endo, represents an important part of the
solution to the challenges faced by the U.S. healthcare
system."
Marvin Samson, Chairman and Chief Executive Officer of Qualitest
Pharmaceuticals, commented, "Apax has been an exceptional partner
for the Qualitest team since 2007, and we thank them for their
contributions as we grew the company while maintaining our
unwavering dedication to compliance. Today's announcement
brings together two highly successful businesses that I believe are
an excellent fit. I am confident Qualitest's unique
capabilities as a leading generics provider ideally complement
Endo's diversified businesses. I am convinced that this
combination will enable our management team and employees to
accelerate the growth of our business and continue the important
work we do here at Qualitest."
The transaction closed on 30 November, 2010.