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Wednesday, 25 January 2023

Affirma Capital, StonePine close acquisition of minority stake in pharma player Nerhadou

Nerhadou has new minority shareholders: A private equity consortium of Affirma Capital and StonePine has closed its acquisition of a “significant minority stake” in local pharma and nutraceutical player Nerhadou International, according to a joint statement (pdf) out yesterday. The statement did not disclose the size of the stake, but said the transaction was worth USD 20 mn.

We first heard of this last year: Yesterday’s acquisition comes nearly one year after the two PE outfits first said they were investing in the company. The interest was driven by the local pharma player’s “sizable presence and dominant market share,” the firms said at the time. Nerhadou is also the first in the country to manufacture oral dispersible film (dissolvable meds, an alternative to pills), giving it a first-mover advantage.

What’s in it for Nerhadou: an IPO? “We are excited to partner with Affirma Capital and StonePine to accelerate Nerhadou’s clear growth trajectory and bring the company to IPO standards,” Nerhadou Chairman Mohsen Shalaby said. The two PE firms would help “solidify our market leadership position,” he said.

More investments planned? The play for Nerhadou is the first joint investment between the two emerging-market private equity firms in Egypt and is part of a wider joint strategy to invest in the country, the statement said. Affirma Capital and StonePine have opened a HQ in Cairo and appointed a local investment team.

StonePine already knows the market: StonePine ACE Fund — a joint venture between StonePine Capital Partners and ACE & Company, a Geneva-based global PE fund — was among the consortium of companies that acquired a 60% stake in Taaleem Management Services in 2019. It has also made an undisclosed investment in funeral services startup Sokna.

ADVISORS: White & Case was the legal advisor for Affirma Capital and StonePine. ADIB Capital, the investment banking arm of ADIB Egypt, was the lead sell advisor on behalf of Nerhadou, while Al Tamimi & Company were Nerhadou’s legal advisors.

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