Baring Asia to Acquire Bushu Pharmaceuticals from Tokyo Marine Capital
Largest private equity deal announced in Japan’s healthcare sector this year
Baring Private Equity Asia (“Baring Asia”) has agreed to acquire Bushu Pharmaceuticals Ltd. (“Bushu”), through funds advised by Baring Asia. Bushu is the leading domestic pharmaceuticals contract manufacturer in Japan. Baring Asia will acquire 100% of Bushu from a fund advised by Tokio Marine Capital Co., Ltd. at an enterprise valuation of JPY 77.3 billion (c USD670 million), representing the largest M&A deal or investment by a private equity fund announced in 2014 in Japan’s healthcare sector.
Bushu is the #1 pharmaceutical contract manufacturing organization (“CMO”) in Japan, the second largest pharmaceutical market in the world. The CMO sector in Japan has grown rapidly since changes to the Pharmaceutical Affairs Law were made in 2005, enabling the full-scale outsourcing of drug manufacturing (14% growth per annum).
CMO as a percentage of overall pharmaceutical drug manufacturing in Japan is still underpenetrated compared to the global market (8% vs 18%) and is expected to grow further as multinational drug companies, without their own Japanese manufacturing facilities, increasingly focus on Japan with new drug launches.
Bushu is well positioned to take advantage of these favorable industry and macro trends. It has recently expanded its capacity to 10 billion tablet dosages per year through the acquisition of the Misato plant from Eisai in March 2014. The company maintains strong relationships with major multinational pharmaceutical corporations.
Jean Salata, CEO of Baring Asia, said, “Bushu has made impressive strides in recent years to become Japan’s CMO market leader and is well positioned to expand through production capacity increases and expansion into new market segments. We look forward to working with the management team under the leadership of Bushu’s President, Mr. Takayuki Kasai.”
About Bushu Pharmaceuticals
Bushu was founded in 1998 and is today the leading pharmaceutical CMO in the Japanese market. The company operates two manufacturing facilities located in Kawagoe and Misato in Saitama prefecture.
Through its pharmaceutical laboratory Bushu can be contracted to carry out formulation and dosage form design. It also handles hormones, high potency drugs and biopharmaceuticals. The three key areas that the Company focuses on are Solid Forms, Packaging and Injectibles through the recent Misato acquisition.
Bushu has established a global-level quality and production system enabling it to obtain US FDA as well as GMP certification in Japan, the US, Europe, and Canada, supporting export products of domestic pharmaceutical companies. Its plant in Misato is certified by 43 countries.
About Baring Private Equity Asia
Baring Asia is one of the largest and most established independent private equity firms in Asia and advises funds that manage more than USD8 billion in committed capital. The firm runs a pan‐Asian investment program, specializing in buyouts and providing growth capital to companies for expansion or acquisitions. The firm has been investing in Asia since its formation in 1997 and has approximately 100 employees located across seven offices in Hong Kong, Shanghai, Beijing, Mumbai, Singapore, Jakarta and Tokyo. Baring Asia currently has over 30 portfolio companies across Asia with a total of 95,000 employees and sales of approximately USD30 billion in 2014. In Japan, Baring Asia has made investments in five portfolio companies: Barclay Vouchers Co. Ltd., Payroll Inc., Ladvik Co. Ltd, Primo Japan, and Net Japan Co. Ltd.
Richard Barton, Newgate Communications