Baring Asia buys Japanese drug maker from Tokio Marine

According to AVCJ Research, Tokio Marine-managed TMCAP2005 - a JPY32.6 billion fund raised in 2005 - purchased Bushu from Shionogi & Co. for JPY8.56 billion (then $93 million) in 2010. Baring Asia's acquisition represents the largest healthcare M&A deal announced in Japan so far this year. It is also the largest secondary buyout in over two years, and the ninth-biggest on record.

Bushu was established in 1998 as an independent pharmaceutical contract manufacturing organization (CMO). It is now the largest player in the domestic market.

"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," Jean Salata, CEO of Baring Asia, said in a statement. "We look forward to working with the management team under the leadership of Bushu's president, Takayuki Kasai."

Japan's CMO industry has grown rapidly since regulatory changes in 2005 permitted the full-scale outsourcing of drug manufacturing. CMO accounts for 8% of drug manufacturing in Japan compared to 18% globally. Further growth is expected as multinational pharmaceutical companies increasingly focus on Japan with new drug launches.

Bushu operates two manufacturing facilities in Saitama prefecture. One of these was acquired last year from listed prescription drug manufacturer Eisai. This increased Bushu's annual production capacity from 3.5 billion tablets to 10 billion tablets.

The company saw the acquisition as part of its strategy to become a contract development and manufacturing organization, able to provide one-stop services for the entire pharmaceutical production process from solid to injectable dosage form. In addition to carrying out drug formulation on a contract basis, Bushu handles hormones, high potency drugs and biopharmaceuticals.

Bushu has been certified by regulatory authorities in the US, Europe and Canada, as well as Japan, which means it can support export products from domestic pharmaceutical companies. The plant acquired from Eisai has been certified by 43 countries.

Sales for the 2012 financial year amounted to JPY14.75 billion, up from JPY12.49 billion in 2011. The company has registered capital of JPY1 billion.

Baring Asia is currently in the process of raising its sixth pan-regional fund, which reached a first close of $3.2 billion last month and is expected to hit the hard cap of $3.85 billion. The firm advises funds that manage more than $8 billion in committed capital, with around 100 employees in offices in Hong Kong, Shanghai, Beijing, Mumbai, Singapore, Jakarta and Tokyo.

Earlier this year, Baring Asia sold its stake in jewelry recycler Net Japan to Japanese financial services group Orix Corp. The firm also agreed but then abandoned plans to acquire the audio-video operations of Japanese car electronics maker Pioneer Corp. in partnership with Onkyo Corp.

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• Topics
• Exits
• Buyouts
• North Asia
• Healthcare
• Secondaries
• Baring Private Equity Asia
• buyout
• Secondaries
• Exit
• Tokio Marine Capital
• healthcare
• Japan