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Investment consortium acquires majority stake in Russia-based JSC Pharmaceutical

An investment consortium acquired a 95.14% stake in Russian pharmaceutical company JSC Pharmaceutical Enterprise Obolenskoe from Alvansa Ltd. for a total investment of 15.5 billion Russian rubles.

The investment consortium includes Moscow-based diversified Russian holding company Sistema PJSFC, VTB Bank PJSC and members of the JSC Pharmaceutical management team. Alvansa is majority-owned by Gazprombank OJSC and UFG Private Equity.

According to a Dec. 28 news release, the companies made the investments via a joint holding company, Ristango Holding Ltd., and have signed a shareholder agreement securing rights of all of the investors to participate in the management of the business.

Sistema invested a total of 1.83 billion Russian rubles in the acquisition of JSC Pharmaceutical, giving it an effective stake of 11.7% in the pharmaceutical company.

In addition, Sistema and VTB signed an agreement under which Sistema will acquire VTB's stake in Ristango Holding within three years of the initial transaction.

The Russian Direct Investment Fund and its co-investors have reached an agreement with Sistema to consider participating in the transaction in early 2019 after additional study of the transaction terms and approval of the transaction terms by a consortium of investors headed by the fund.

JSC Pharmaceutical will be merged with Sistema portfolio company JSC Binnopharm. The combined company will operate four pharmaceutical production sites in Moscow and the Moscow region and will be established in the first half of 2019.

The combination of JSC Pharmaceutical and JSC Binnopharm will "create a unified company that is a top-10 Russian pharmaceutical company in the non-state sector with a diversified portfolio of over 200 products," Sistema stated in the news release. "Products that are leaders in their segments include vein tonic Venarus, the probiotic Maxilac and the liver protectant Urdoxa."

As of Dec. 27, US$1 was equivalent to 69.55 Russian rubles.