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.”
Richard Barton, Newgate Communications
Brendan Jennings / John Sunley, Ashton Consulting
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