Baring Private Equity Asia said it has agreed to acquire Bushu Pharmaceuticals from Tokio Marine Capital at an enterprise value of Y77.3 billion ($670 million).
Saitama-headquartered Bushu, which makes drugs for third parties on a contract basis, expanded its capacity to 10 billion tablet dosages per year by buying a plant in Misato in March from Japanese drug company Eisai, which was cutting costs.
Japan’s Pharmaceutical Affairs Law changed in 2005 to allow Japanese license holders to outsource 100% of drug manufacturing. This business, called contract manufacturing, is still a small percentage of overall drug manufacturing in Japan at 8% compared with 18% globally.
Baring Asia expects that percentage to expand in the world’s second-largest drug market after the US. Baring Asia’s chief executive and founding partner Jean Eric Salata said in a statement on Monday that Bushu “is well positioned to expand through production capacity increases and expansion into new market segments”.
Founded in 1998, Bushu operates two manufacturing facilities located in Kawagoe and Misato in Saitama prefecture. It competes with the likes of Fujimoto Pharmaceutical, Otsuka Holdings and Takeda Pharmaceutical.
Bushu was a subsidiary of Japanese drug giant Shionogi. It generated Y5.6 billion of sales the last year it was owned by Shionogi. It was bought by Tokio Marine, a unit of Tokio Marine & Nichido Fire Insurance, in February 2010.
Through its pharmaceuticals laboratory, Bushu can be contracted to carry out formulation and dosage form design. It also handles hormones, high potency drugs and biopharmaceuticals. The three key areas that the Company focuses on are Solid Forms, Packaging and Injectibles through the recent Misato acquisition.
