The fund is also financing ArchiMed’s acquisition of the company with a loan of about 250 million.
Ares Management, an investment fund manager specialising in private debt, has taken an 8% stake in Spanish pharmaceutical company Suanfarma, according to financial sources.
Ares’ entry into Suanfarma’s capital comes in the context of its acquisition by ArchiMed, a French private equity fund specialised in investing in the healthcare sector.
ArchiMed reached an agreement on 21 September to buy a majority stake in the Spanish company at a valuation of between 500 and 550 million euros. Ares is financing the transaction with a loan of approximately EUR 250 million.
Entering into the capital of Suanfarma allows Ares to reduce the cost of the loan, as it ensures a higher return at the time of divestment, according to the sources consulted, who point out that the price of the loan would be less than 6%.
With its investment, ArchiMed aims to boost the growth of Suanfarma to reach a valuation of more than 1,000 million euros and take it to the stock market in a period of between three and five years.
The transaction marks the exit of ICG and ProA capital funds from Suanfarma’s shareholding, which has been backed by private equity since 2016. The company specialises in producing active ingredients for the pharmaceutical, veterinary and nutritional sectors and ArchiMed will control its capital with a stake of between 80% and 85%.
Ares and Suanfarma’s management team, led by founder and chairman, Héctor Ara, and CEO, Francisco Fernández, share between 15% and 20% of the pharmaceutical company, which reserves 150 million to grow with buyouts.