Hypermarcas strikes competition and grows
Valor Econômico
Why does Hypermarcas bother so much? Between December 2009 and December 2010 the company made important acquisitions in the pharmaceutical sector that already represent nearly 50% of the earnings of the group, known for being purchasing machine that runs like a tractor over its main rivals to wrap up its deals. The company is in second place in the segment generic drugs in the country and it does not hide its plans to become the leader in the pharmaceutical segment.
Its last shot, the purchase of Mantecorp, for R$ 2.5 billion (US$ 1.5 billion), took the market by surprise. The laboratory Aché, pointed as the buyer of the pharmaceutical company, was run over by Hypermarcas, closing the deal at the last minute of the last quarter. The same happened to Pfizer in the last quarter of 2009, when the American multinational was wrapping up the last details to buy the Goiás-based Neo Química. Hypermarcas hit like a tornado and closed the purchase of the national laboratory, considered strategic for the growth of the group in the sector.
Like a tractor, the entrance of Hypermarcas in the sector helped inflate the pharmaceutical assets in the country. The reference of acquisition for an asset abroad turns around 12 to 14 times the Ebtida (Earnings Before Interest, Taxes, Depreciation and Amortization) of a company. The last acquisition of the group, Mantecorp, increased it to 20 or 22 times the Ebtida. "The absorption for a premium allows offering a greater value for the asset", said one source. The fact is that the national industries have become more expensive, and even though, attractive. "It is all a matter of money. Hypermarcas bought it because it offered more", he said.
Before purchasing Neo Química for R$ 1.3 billion (US$ 764.7 million), the company controlled DM and Farmasa, midsize laboratories that allowed the group to grow in the OTC segment. Mantecorp projected the group on prescription drugs. Many have questioned the modus operandi of the company of closing its deals. But the fact is that the group has received strong financial support of the BNDES (National Development Bank) in those transactions. In October, the company issued nearly R$ 1.1 billion (US$ 647.1 million) in simple debentures - the operation has total purchase guaranteed by the BNDESPar, arm of participations of the BNDES. The Government considers Hypermarcas a consolidating company in the sector. And the Governmental support aims at containing the growth of the multinationals in the segment that is considered strategic.
It is also a pro for Hypermarcas to be traded on the stock exchange - which allows it greater access to capital and to use its shares as an exchange currency. The shares of the group have registered an 18.9% fall in 12 months, but growth of 117.4% since its IPO in April 2008. Besides, there is the benefit of the premium in the mergers, which makes it faster and provides it greater firepower. In an interview to Valor, Claudio Bergamo, Chief Executive Officer of Hypermarcas, said the company "insists on delivering everything it promises, since April 2008", when it made its IPO. "Our strategic plan has always been clear. We are consolidators". He added that the sector is being consolidated and that few groups will survive. "We have a flexible capital structure, with shares we can use as an exchange currency".
The next challenge of the group - also expected by the Government - is to grow on research and development (R&D), little common investment among the national pharmaceuticals. Today, between 1% and 1.5% of the earnings of the company is directed to innovation. The goal of the company is to increase such percentage. But the path should not follow the development of new molecules, like it is done by the global giants - whose spending on R&D are between 10% and 20% of annual earnings of those companies. So far, the group does not foresee expanding overseas.