"We signed the deal one afternoon. I recall that afterwards I was on a plane with Peter Burema (Ranbaxy chairman for Europe, CIS, Africa and Latin America i.e.), waiting for the banks in America to open for us to transfer the money. I had to pinch myself to realize I really did it". This is how Malvinder Mohan Singh, Ranbaxy CEO, recalls the biggest deal he has ever done, the acquisition of the Romanian drug maker Terapia Cluj from Advent investment fund for 324 million dollars.
Singh came to Romania for the first time this spring to personally oversee the takeover of Terapia, though he was handling two other similar deals on the European market.
In a single week, the biggest player in the Indian pharmaceutical industry, added three major players to its portfolio, including a Romanian one. He had initially planned to spend just a few days here, but ended up spending twelve. "This year, I haven't spent so much time in a single location anywhere else in the world. I ran Ranbaxy operations in Romania, but I spent most of the time trying to make sure negotiations didn't get stuck and the deal got to be sealed. This was the most important deal for me, which is why I spent so much time here," Malvinder Mohan Singh, Ranbaxy CEO and Managing Director, told ZF.
Ranbaxy has been operating for several years in Romania, but only through an office, meanwhile closely watching the domestic pharmaceutical market. "For Ranbaxy, India and Romania are similar countries. Romania matched our development policy very well. When I took over the CEO position early this year, it was very clear to me we wanted to make strategic investments on important markets, with growth premises, where we saw we could create value," says Mohan Singh.
The team in charge of M&A in Europe was watching for all opportunities in Europe, but their focus was on Terapia. "As talks got underway, Advent received 20 bids for Terapia. We were among the ones that passed on to the next round of negotiations," says Mohan Singh. Advent was advised by Merrill Lynch.
The first to take care of the Terapia deal was the group's head of M&A, helped by a whole team. It was them who would decide on bids and set things in motion. Ranbaxy CEO at that time preferred to keep a low profile. The entire team handling Romanian operations was highly upbeat and enthusiastic, so his decision to come to Romania was a natural one. From Bucharest, Mohan Singh went straight to Cluj, where he met Terapia's then CEO and had the opportunity to visit the plant. He says he managed to persuade Advent officials they had the best plans for Terapia and that both sides would stand to gain from the deal.
"Financial aspects also mattered, of course, but I believe Advent was well aware of the fact that beside the price paid, Terapia was a good company that needed to be taken further," said Mohan Singh.
Terapia
In 1921, Renbold Adalbert and Stern Wilhelm set up Terapia chemical-pharmaceutical laboratory in Cluj-Napoca
The plant operates the first product exports in 1952
Terapia becomes a joint stock company in September 1991
Advent investment fund purchases Terapia drug maker in 2003
In 2005, Terapia registers sales standing at 80 million dollars
In 2006, it is acquired by Ranbaxy Indian company
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