• Cheplapharm is a leading family-owned German pharmaceuticals company
  • Fresh capital enables acquisition of two highly profitable drug licenses from Roche
  • Subordinated loan is largest junior direct lending Mittelstand transaction in Germany in 2016

Frankfurt-based asset manager Rantum Capital has completed another investment into a leading family-owned and –run German Mittelstand enterprise, this time a subordinated loan to pharmaceuticals company Cheplapharm Arzneimittel GmbH. The loan is the largest sponsorless mezzanine direct lending transaction in Germany in 2016.

Cheplapharm, a family-owned company headquartered in Mesekenhagen in North-Eastern Germany is run by the two siblings Sebastian Braun as CEO and Bianca Juha as Chief Scientific Officer. The company focuses on the acquisition of drug licenses with expired patent protection and no generics competition. These drugs have become too small to remain relevant for the big pharmaceuticals companies but are still highly cash generative for Cheplapharm as new owner. In the past 10 years, Cheplapharm has built a diversified portfolio consisting of drugs covering a wide array of indications. Production and distribution of the drugs are outsourced. An in-house medicinal department ensures flawless product quality as well as full compliance with all applicable regulation.

The transaction was sourced on a proprietary basis through Rantum’s network. Rantum Industrial Partners Thomas Ebeling (former executive board member at Novartis) and Dr. Karl-Ludwig Kley (former CEO of Merck) were actively involved in Rantum’s due diligence, both contributing their in-depth experience with the pharmaceuticals industry in general and Cheplapharm’s business model in particular.

Rantum Industrial Partner Thomas Ebeling commented: “We are familiar with the company’s business model and have closely followed Cheplapharm’s success story in the past. We are now excited to support the company’s future growth not only with our capital but also with our industry contacts and networks. Cheplapharm’s development under the leadership of CEO Sebastian Braun is a prime example for successful entrepreneurship in European healthcare and we are looking forward to partnering with Cheplaharm in the future while generating an attractive return for our fund investors.

With the investment, Rantum continues the swift deployment of its maiden fund (Rantum Private Debt Fund I) which is backed by European insurance companies and pension plans. The fund’s investment focus is on subordinated loans with all-cash coupons which are handed out to growing Mittelstand businesses requiring extra capital for unique situations like larger growth projects, succession scenarios, add-on acquisitions or repurchase of minority shareholders.