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Fagron Group enters Mexican market with acquisition of Cedrosa

Fri, 14/06/2019

Fagron announces today that it has entered into an agreement to acquire Central de Drogas, S.A. de C.V. ('Cedrosa'), a leading supplier of raw materials (Essentials) to compounding pharmacies and the pharmaceutical industry in Mexico, on May 10th, 2019. Through the acquisition of Cedrosa, Fagron enters the attractive (growing) Mexican market for personalized medicine, further strengthening its position in the Latin American continent. Cedrosa is located in Naucalpan, just northwest of Mexico City, employs 98 FTE, and reported turnover of Mex$ 480 million (c. € 22.5 million) and an EBITDA-margin of 14.5%.

The acquisition perfectly fits Fagron's buy-and-build strategy as it opens up the interesting Mexican market for personalized medicine. With its favorable demographics, a rapidly growing middle class and a focus on prevention and lifestyle, the Mexican market represents substantial growth potential for Fagron.

Rafael Padilla, CEO of Fagron, said: "The Mexican market for personalized medicine presents a very promising opportunity for Fagron to expand our existing footprint in Latin America. Although Mexico has the same growth drivers as Brazil, the market for personalized medicine in Mexico is still in its infancy, offering a lot of growth potential for Fagron. We are very excited to further develop, innovate and grow the market in Mexico, in close collaboration with the experienced team of Cedrosa. We look forward to welcoming our new colleagues from Cedrosa into the Fagron family."

The acquisition price for Cedrosa amounts to Mex$ 352.0 million (c. € 16.5 million) in cash, with the potential for an EBITDA-linked earn-out of up to Mex$ 110.5 million (c. € 5.2 million) in cash over a two-year period. The total consideration for the acquisition of Cedrosa is capped at Mex$ 462.5 million (c. € 21.7 million). The acquisition will be financed from the existing debt facilities of Fagron.