Yvan Vindevogel, Founder and CEO Damier Group & Chairman Vemedia Consumer Healthcare

SME Consumer Healthcare Players: Brand Acquisitions

Yvan Vindevogel

• Founder Omega Pharma

• Founder Vemedia Consumer Health

• Founder Damier

‘Passionate consumer healthcare brand builder’

Consumer Healthcare is hot

• MNC: record number of scale transactions => Carve outs create opportunities for consolidators and SMEs

• Transaction multiples stabilize (at a high level)

transaction multiples

2000 2005 2010

2015

Consumer Healthcare is hot

• Cash is no longer the only currency that matters

• Generic companies move into Consumer Healthcare

• Private equity gets active again

• The middle market M&A activity is accelerating

Macro-economic drivers

Demography: ageing population

Invest in brands targeting the ageing population (proteins for sarcopenia, anti-ageing food supplements,….)

Macro-economic drivers

Prescription bound to OTC switching

Invest in Rx or (branded) generics with switch potential or consultancy companies who are specialized in switching

Macro-economic drivers

Increasing number of distribution channels (Supermarkets, gas stations, Online drugstores and pharmacies, …)

Invest in Online companies and brands (see Flinndal)

Macro-economic drivers

Consumer empowerment

Selfmedication Easy access to healthcare information (internet)

(connected) self diagnostic tools

Macro-economic drivers

Lifestyle conditions (obesity, smoking control, sexual health, sedatives & sleep aids,

systemic cardiovascular and cholesterol reduction, …)

Invest in lifestyle brands

Consumer Healthcare : a Mixed Business Model

The winners will be those companies that successfully combine the power of science with knowledge of the customer

Acquisition criteria

• Strategic fit !

• Focus

• Assess potential (internationalisation & line extensions)

• Buy competitors, then multi-branded strategy: “own the category”

• High versus low quality assets and local versus multilocal

• Integration potential

• Innovative companies / products

• Pay the right price

Value creation

• Portfolio optimization

• Create scale (inter alia distribution platform) and geographical expansion

• Innovate

• Reinvigorate dormant brands

• Create dynamism around brand

• Guerrilla marketing, new ways of A&P spending,…

• Build further on the notoriety of ‘old’ brands

• The right people for the right execution

• Don’t fool the consumer

Business case: Vemedia building up an SME Consumer Healthcare player

Buy-out-of

Vemedia BV

from Solvay Pharma

2002

Acquisition of

Viatris Manufacturing BV,

ABC Chemicals SA

and Distributie Care BV

2006

Acquisition

of Valdispert brand

from Solvay

2008

Acquisition

of Sleepzz

and Podosan brands

2010

Acquisition

of JeCare

& Nutrivital BV

2012

Acquisition

of Oenobiol

& Stardea

2016

2013 Public to private

(mng & IK)

Sale of ABC

Chemicals

to Euphaco

2011 Acquisition

of Imgroma BV

2009 Sale of

Baldrian Dispert brand

for Germany and Austria

to Chelplapharma

2007 Public company

(without listing)

2005 CEO becomes

sole owner

after acquiring

the shares of the

other shareholders

1961 Establishment

of Vemedia BV

2015 Acquisition

of Labima

Acquisition

of OJG

Consumer Care

BV (Natterman)

2014

Business case: Vemedia building up an SME Consumer Healthcare player

Year Equity/debt instruments issued use of funds

2006 Vendor loan from Distributiecare owners Distributie Care

2007 Capital increase through Public Future acquisitions

Placement subscribed by pharmacists,

suppliers, family offices

2007 Capital increase subscribed by owners of Methapharma

Methapharma

2008 Senior bank debt, a mezzanine loan with Dagravit &

warrants and cash from sale and lease Manufacturing Plant

back of real estate of the plant Valdispert trademark

2009 Private Bond with warrants (c. 30 private Spanish Solvay brands (but

persons) acquisition did not

materialise, money was used

for future growth)

2010 Senior bank debt and two subordinated Sleepzz trademarks

loans from small PE

2010 Senior bank debt and a vendor loan Imgroma

2012 Private placement of a subordinated Valwater, Nutrivital and

bond refinancing mezzanine loan

2013 IK Investments Excilor

2016 Complete refinancing Oenobiol

Stardea

Wide range of

instruments have

been used to

finance acquisition

growth.

Valdispert case (2007) reinvigorate ‘old’ brand

• Valdispert Acquired from Solvay in April 2008

• NSV development: € 13,3MM (FY/08) to € 26,3 MM (FY/15); + 98%

• Key growth drivers :

1. Core market growth

• New Packaging & line extensions

• Strong messages, claims, evidence & most stringent regulatory route

• Strong campaign / media mix (TV, digital, PR)

• Switch from Rx to OTC

2. Innovation

• Line extensions : calming & sleeping, mood,….

• Launch of broad assortment of melatonin products

3. Geographical expansion

• 2013: France

Valdispert case (2007) dominate the category

• Acquisition of Sleepzz (nr. 2 C&S brand in the Netherlands)

• Acquisition of Melatomatine (nr. 3 C&S brand in the Netherlands)

• Acquisition of Nustasium (C&S brand in Belgium)

Excilor case (2012) focus on niche category

• Acquired from JeCare in December 2012

• NSV development: € 9,5MM (FY/12) to € 17,0MM (FY/15); + 79%

• Key growth drivers :

1. Core market growth

• Hard re-launch nail fungus range

• Strong new messages, claims, evidence

• Strong campaign / media mix (TV, press, outdoor, digital, PR)

2. Innovation

• Launch 3-in-1 Protector Spray October/15

• Pipeline of breakthrough products

3. Geographical expansion (now 32 countries)

• 2013: France, Turkey, Hong Kong, Australia

• 2014: Portugal, Romania, Hungary, Bulgaria, Baltics, Bosnia, Slovenia, Ukraine

• 2015: Netherlands, Russia, Kazachstan, Romania, South Africa, Malaysia, New Zealand

Oenobiol (2016)

invest in lifestyle - anti-ageing - capitalize on the notoriety of well-known brand

• Created in 1985 by Dr Marie Béjot

• Acquired by Sanofi in 2010

• NSV : ± 27 mln €

• Wide range of nutritional supplements for suncare, haircare and slimming

• Key growth drivers :

1. Keep brand DNA, although look out for adjacent categories

2. Innovative marketing

3. line extensions and innovation (in collaboration with 3rd parties - open ‘innovation platforms’

4. at a later stage : geographic expansion

Business case: Damier Group

• Seeks to build up a healthcare group by intertwining companies, brands or distribution platforms that demonstrate a natural fit to grow together and benefit from each other

• Seeks to actively run an investment activity with the purpose of building up a portfolio of small to mid-size companies or brands throughout Europe and actively develop such portfolio companies on a stand-alone basis until the time is right for them to be sold on or be integrated into a main healthcare group.

• Target group typically consists of established companies with a turnover of €5m – €100m.

• Sole investor but preferably also investing alongside other investors

Business case: Damier Group

• ABC Chemicals (SOLD )

• Vision Healthcare (former Takeda Dutch OTC portfolio)

• Flinndal (in the Netherlands n°1 online branded food supplement company)

Q&A

Thank you !