Quadria seals landmark Indonesia pharma deal

This is thought to be the first private equity investment in Indonesia's pharmaceuticals industry. The size of the transaction was not disclosed, but Quadria is looking to complete 6-7 deals from a $300 million fund, which suggests check sizes of $40-50 million.

The firm reached a first close of $107 million on Quadria Capital Fund in September 2013. This is the first vehicle the GP has raised independently, its predecessor being the Milestone Religare India Build-Out Fund, which was acquired earlier in 2013.

Headquartered in Jakarta and controlled by the Tan family, Soho Global is one of Indonesia's largest pharmaceutical players. It produces a range of herbal and synthetic treatments - generics as well as licensed formulas - and in 2013 set up a joint venture with Germany's Fresenius Kabi to manufacture liquid injectable products and branded generics.

The company has exposure all the way along the value chain from manufacturing to distribution, with channels that cover 90% of Indonesia's major cities. It also has a presence in other emerging markets in Southeast Asia as well as Nigeria, Lebanon, Mongolia, Mauritius, Sri Lanka and Pakistan. Soho Global employs around 6,000 people.

"We are providing capital to grow the business and expertise to help them identify and bring in new products that will diversify their portfolio. It is a very broad business today but there are opportunities to move into higher value products," Hareesh Nair, vice president at Quadria, told AVCJ.

Asked why it has proved difficult for foreign private equity to make a breakthrough in Indonesia's pharmaceutical industry, Nair noted that companies have a variety of sources of capital available to them and are therefore looking for partners that offer support in achieving particular goals.

"For an investor and a pharma operating company to come together there has to be a clear idea of how the investor is adding value, particularly in Indonesia where promoters are not just on the market looking for capital," he said.

This is the second investment from Quadria Capital Fund. The first came in December 2013 when the PE firm led a consortium - including development finance institutions DEG and Swedfund - that acquired a majority stake in Indian hospital chain Medica Synergie.

The healthcare portfolio also features one investment from the India Build-Out Fund: HCG, a specialist cancer care network headquartered in Bangalore. A third healthcare investment was exited in June 2014 when ICICI Venture bought a stake in Krishna Institute of Medical Sciences Ltd (KIMS), taking out Quadria's holding in the process.

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• Topics
• Southeast Asia
• Healthcare
• Expansion
• Quadria Capital
• healthcare
• Indonesia
• Southeast Asia
• Growth capital