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Zentiva Stage: Growth, LBOs and Special Situations Date of Investment: 1998 Web Site : http://www.zentiva.cz Stock Symbol : LSE: ZEND, P |
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Zentiva, located in Prague, is the leading pharmaceutical company in the Czech and Slovak Republics. In May 1998 Warburg Pincus teamed up with management to fund a buyout of the 67% of Leciva a.s. (Leciva) owned by the Czech government's privatization authority and to fund subsequent tender offers for the remaining shares held by public shareholders. At the time of Warburg Pincus' acquisition, it represented the largest private equity investment made in Central and Eastern Europe. Following our investment we worked closely with management to develop a strong product pipeline, launch new products quickly and market them effectively. As a result, the company dramatically improved its gross margins and significantly increased profitability. In September 2003, Zentiva acquired Slovakofarma a.s. (Slovakofarma), the second largest pharmaceutical company in the Czech Republic and Slovakia, and integrated Slovakofarma's operations with those of Leciva. Zentiva has approximately a 16% value share and 40% volume share of the Czech and Slovak markets. Its business is comprised of 73% branded generics, 10% in-licensed pharmaceuticals, 13% over-the-counter pharmaceuticals and 4% active pharmaceutical ingredients. The company's goal is to sustain its leading position in the Czech Republic and Slovakia through new product introductions, while growing revenues through expansion in countries such as Poland, Russia, Romania and, potentially, Western Europe. The company successfully completed its IPO in June 2004. Warburg Pincus exited the investment through a series of stock placements and sold its final 20% shareholding in the company to Sanofi-Aventis in March 2006.
