EXCLUSIVE- Private-equity consortium takes significant minority stake in Marcyrl: DevelopmentPartners International (DPI) and Amethis have acquired a “significant minority stake” in local pharma player Marcyrl, according to a joint statement (pdf). The move will allow Marcyrl to invest in talent and upgrade its tech as it looks to expand at home and abroad.

The transaction: The players declined to disclose how much of the company was acquired and the value of the transaction, but told us that the transaction was made via “a combination of primary and secondary capital to fund the company’s growth plans.” DPI committed funds via its USD 900 mn African Development Partners III (ADP III) fund — one of the largest Africa-focused PE funds in the world — and Amethis participated via its Amethis Fund II.

About Marcyrl: Founded in 1998, Marcyrl has become one of the country’s 10 leading pharma companies. It is focused on producing specialty generics and has introduced innovative antiviral products and hormonal therapy treatments to the local market.

ADVISORS- PwC provided financial advice to DPI and Amethis while Freshfields Bruckhaus Deringer and White & Case were buy-side counsel. HC Securities and Investment was the sell-side financial advisor and Zaki Hashem & Partners was counsel.

The company has seen strong growth in recent years: The company has tripled its revenues over the past five years and has acquired a more than 2% share of the local market. The company’s cardiovascular segment is the biggest contributor to growth, accounting for more than 40% of its revenues. Categories targeting women account for 30% of revenues, gastrointestinal is 15%, and diabetic therapies are 7%.

Where the money’s going: Marcyrl will deploy the capital to bring in fresh expertise and production technology, which will help it reach new markets in Africa and expand further in Egypt, George Messiha, Marcyrl’s managing director for sales, told us.

DPI + Amethis are no strangers to Egypt: DPI has experience in Egypt’s pharma sector having been a part of the consortium of investors that acquired almost all of Adwia in 2020. It was also a major investor in local retailer BTECH — a stake it exited last year — and holds a minor stake in GB Auto’s payments firm MNT Investments. Amethis completed its first transaction in Egypt last year after joining a consortium of foreign investors to acquire 90% of non-banking financial services firm GlobalCorp.

Why pharma? It’s a defensive sector. “Pharma has always been a sector that we think is a very investible sector in Egypt due to its defensive nature,” Ziad Abaza, managing director at DPI, told us.

Why Marcyrl? “[Marcyrl] is a platform that has significant runway for growth, both locally, but also outside of Egypt,” Amethis partner Toufic Khoueiry told Enterprise. “The company’s one of the largest local players in the market and it has a portfolio of generic med drugs that are very well positioned in their respective therapeutic areas,” he said. “We believe that Marcyrl is uniquely positioned given the therapeutic areas that it focuses on, but also because of its positioning within these areas,” Abaza told us.

Why DPI + Amethis? Marcyrl chose to approach foreign investors to line up more exposure for the business and improve governance, Messiha told us. “We found good people at DPI and Amethis who we felt can help us keep the culture while institutionalizing the business,” he said.

DPI + Amethis are keeping their eyes out for further opportunities: “We are looking at a couple of investments in other sectors through our different funds. Marcyrl is our second investment in Egypt, which I think underscores our increasing focus on the Egyptian market as part of our pan-African strategy,” Khoueiry told us. Meanwhile, DPI is continuing to look for opportunities in defensive sectors, Abaza said. “For us, Egypt remains a key country. We believe the fundamentals of the young growing population will underpin growth in the country,” he told us.

Correction: 4 April, 2023

A previous version of this article incorrectly stated that DPI owns a 33% stake in MNT Investments. The firm’s ADP II fund has fully exited its 25% stake in the company, while ADP III has reduced its ownership from 8% to 5%.

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