RETAIL/WHOLESALE

Berlin  -  In the spring of 2005 the Hexal founders Thomas and Andreas Strüngmann cashed up: After 25 years in business, the brothers sold within several months not only Germany’s leading generic drug manufacturer, but also the sister company Betapharm as well as their majority shares in the US company Eon Labs. The proceeds amounted to almost 6 billion euros. The enterprisers became investors – with a portfolio as wide as it was surprising: According to information from PHARMA ADHOC, around 3 years ago the generic drug pioneers bought quite a large packet of shares in the British pharmaceuticals trading group Alliance Boots. The traces of the project "Sprint Twinstar" lead from Munich via the Cayman Islands and Gibralter to Nottingham.

With a turnover of 17.2 billion British pounds, Alliance Boots is number 3 in the European pharmaceutical market after Phoenix and Celesio; with pharmacy chains comprising of a total of 3200 outlets, the company even surpasses its competitors. In June 2007 the giant was taken from the stock market – at that time one year had just passed since the merger of the British-Italian pharmacy wholesaler Alliance UniChem and the British drugstore chain Boots.

The 12.4 billion pound takeover by the chairman Stefano Pessina and the US financial investors KKR was the largest ever leveraged buy-out in Europe. The two investors each laid out around 1 billion pounds of their own resources for the deal: KKR by means of various funds in cash, the Italian tycoon by transferring the previously held shares to Alliance Boots. Almost 9 billion pounds was advanced by investment banks, including Deutsche Bank, Citigroup, J.P. Morgan, UniCredit, Barclays, Merrill Lynch, the Bank of America and the Royal Bank of Scotland.

Simultaneously the banks, as so-called "equity underwriters“, together invested around 1.4 billion pounds in the buyout company with its head office on the tax haven of Gibralter. There were no voting rights whatsoever for the packet of shares that totalled 40 percent; however, the banks were granted the possibility to syndicate their investments, i.e. to transfer these to institutional investors for a fee.

In this way the generic drug brothers evidently came into play. In 2007 the trust administration of the family acquired 5.83 percent of the shares for 295 million euros via a company by the name of "Sprint Twinstar“ based in Munich. The London branch of Deutsche Bank and the Bank of America had previously submitted an offer for exactly the same packet to the amount of 200 million pounds each. However, Barclays, J.P. Morgan, the Munich UniCredit subsidiary HypoVereinsbank or the other banks could also have submitted packets to the German investors.

Today a company by the name of "Sprint Twinstar“ with its head office on the Cayman Islands holds 20,000 non-voting, redeemable preferrence shares in the holding of Alliance Boots. Whether "Sprint Twinstar“ is to be associated with the Strüngmann family and how, remains unclear in view of the discretion in the Caribbean offshore haven – the company is only one of at least a dozen financial platforms that have settled on Cayman and are partly exempted from tax, through which Alliance Boots is controlled.

When asked, Thomas Strüngmann did not want to comment on the investments to PHARMA ADHOC. The question of whether and how the British "Sprint Twinstar“ – anyway the third company with this title that is so refreshingly open to interpretation – was or is involved in the manoeuvre is therefore also open. The company was founded at the end of June 2007 by Strüngmann CFO Klaus-Joachim Krauth – exactly a day after Pessina and KKR had taken Alliance Boots from the stock market with the help of their investment partners.

However the exact construction looks, the German investors are also represented on the domestic market through their involvement with Alliance Boots: With a share packet of around 30 percent, the company is the largest shareholder of the Frankfurt pharmaceutical wholesaler Andreae-Noris Zahn AG (Anzag).

Patrick Hollstein, Mon, January 11, 2010 06:18pm CET