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Deal 5: Frontier Pharma Managing Director Kiren Naidoo on Zdravlje Leskovac Acquisition

Deal 5: Frontier Pharma Managing Director Kiren Naidoo on Zdravlje Leskovac Acquisition

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On January 15, 2021, CEE Legal Matters reported that BDK Advokati had advised Frontier Pharma and the Baystone investment group on the acquisition of Zdravlje Leskovac, a Serbian pharmaceutical company owned by Actavis, which is itself a subsidiary of Israel's Teva. CEEIHM spoke with Kiren Naidoo, Co-Founder and Managing Director at Frontier Pharma, to learn more about the acquisition.

CEEIHM: To start, tell us a bit about Frontier Pharma.

Kiren: We are a UK-based, EMEA-focused pharma investment company with operational expertise spanning major pharma (e.g. GlaxoSmithKline), generic pharma (e.g. MN Pharma), and investment banking (e.g. Merrill Lynch). Our team has a track record in building high-quality international pharma companies and experience in manufacturing and selling pharmaceuticals to both emerging and developed markets, including the US.

CEEIHM: What was it about the target that you found particularly attractive? 

Kiren: There are multiple reasons. The quality of manufacturing is world-class – the company supplies approximately 40 countries around the world across Europe (Western & Eastern), Asia-Pacific, Southern Africa, and Latin America. The company supplies both Teva (its parent) and a range of other multinationals on a contract manufacturing basis. Employees are highly qualified, well-trained, and loyal. The company also has a high-value brand (Zdravlje, which means “Health”) which dates back to the 1950s and is synonymous with quality. This is an ideal spring-board to build a high-quality multinational pharmaceutical company.

CEEIHM: What are your plans for Zdravlje Leskovac in the near and mid future once the deal closes?

Kiren: Our first priority is to expand the company’s contract manufacturing offering as it offers a very attractive quality/price proposition to third parties looking for outsourced supply (which is a growing trend in the business). We have already secured new business in this regard. We would also look to build a commercial business with our own products (Zdravlje-branded) across prescription and consumer health (non-prescription). We would also like to leverage the existing international approvals to expand internationally (across CEE, Asia-Pacific, Middle East, Africa, etc.) to build a more international business. We have a robust organic strategy but will also use M&A / alliances / joint-ventures where it can accelerate our strategy.

CEEIHM: What would you say was the most complex aspect of the deal? 

Kiren: COVID-19 posed multiple logistics and administrative challenges. It also brought about a degree of uncertainty regarding supply chains and demand. There are other traditional complexities that are typical when carving out businesses from broader corporate structures but nothing the principals could not overcome.

CEEIHM: Why did you choose BDK as your advisor on this acquisition?

Kiren: We have worked with BDK before (including on a privatization project in 2016) and in those cases found them to be professional, commercial-minded, pragmatic, and very supportive.

Originally reported by CEE In-House Matters.

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