Ascendis has acquired Chempure, its fourth acquisition in 12 months with a combined deals value of R500m. The transaction will further consolidate the group's position in South Africa's healthcare products market and is in line with its vertical integration strategy to acquire key players in the central parts of the health products value chain.
Chempure is a key importer and marketer of specialty chemicals to the food, health food, pharmaceuticals and cosmetics industries and represents more than 10 major international branded chemical ingredient suppliers, such as DSM, Hilmar, Purac and Sinochem. It also provides technical expertise to keep its clients abreast of new research and diversified products in the fields of vitamin and nutritional supplements as well as food and branded consumer goods.
Following the transaction, Chempure will slot into group's human health division. The group's plant and animal division includes Avima and Efekto, which cover the entire value chain right through to retail. The group's African footprint will open new distribution channels for Chempure to 20 African countries.
CEO of Ascendis, Karsten Wellner states the group has started negotiations for possible future acquisitions in the medical device, personal care and nutraceutical sectors totalling a further R1.5bn of deal pipeline. Growth plans
As the wholly owned branded health products subsidiary of private equity company Coast2Coast Investments, it has ambitious growth plans in the market for over-the-counter healthcare products, pharmaceutical and medical devices and the plant and animal healthcare sectors.
Established in 2005, Coast2Coast is a South African-based private equity company managed by CEO Gary Shayne and COO Cris Dillon. The group makes use of its own balance sheet and senior and mezzanine debt to fund its investments.
'Nutraceutical' describes substances that offer significant nutritional and health benefits and are in high demand from companies keen to enhance their food-product offerings. It estimates the domestic market for health products including pharmaceuticals, nutraceuticals, medical devices and personal care for human consumption at around R50bn each year.
"We are planning a JSE main board listing next year to gain access to further expansion capital and possibly looking to raise a corporate bond," continues Wellner. The group recently appointed Robbie Taylor, a qualified chartered accountant, with a strong track record at JSE-listed Country Bird Holdings, as its CFO.
The group's aggressive acquisition strategy should not be misinterpreted as one of quantity over quality. "We are only interested in acquiring strong defensive businesses which have a strong competitive advantage and track record," concludes Wellner.