Synthon

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Established in 1991, Synthon is a leading global developer of complex generic pharmaceuticals, whose products are approved by regulators in over 100 countries.

With more than 200 customers worldwide, Synthon’s 1,600 employees deploy state-of-the-art facilities to develop, manufacture, and — in select markets — distribute new generic drugs.

Sector: Healthcare
Strategy: Private Equity
Investment year: 2019
Exit year: 2024
Region: Europe
Investment status: Realised

The BC angle

Sub-sector expertise

BC Partners was able to leverage its deep sector expertise, local knowledge and prior experience from investments in Aenova and Pharmathen.

Proprietary insights

Following three years of tracking the company’s progress and building relationships with founders and management, BC Partners secured advantaged access, enabling a bilateral partnership.

Partner of choice

BC Partners’ existing relationships in the sector positioned the firm as the preferred partner.

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Investment thesis

Long-term sector growth: As governments and healthcare systems seek to lower costs and drive savings, they are increasingly relying on the development of generic drugs, with the most complex being outsourced to specialists.
Deep defensive moats: Synthon has multiple barriers-to-entry including world-class R&D expertise, industry leading IP capabilities, high-quality manufacturing facilities and global regulatory know-how. Lengthy development timelines (upwards of 5 years) and long-term 5-year exclusive contracts with renewal rates of over 99% plus a network of blue-chip clients combine to provide downside protected growth opportunities.
Best-in-class performance: Synthon’s high-calibre staff and facilities, strong reputation, and market-leading R&D / IP established a long-term competitive advantage to capitalise on sector tailwinds.
Limited development risk: The company’s de-risked, long-term development pipeline offers strong revenue visibility and clear avenues for value creation through BC Partners’ dedicated Portfolio Operations team.

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The story

BC Partners leveraged its extensive sector expertise in pharmaceuticals and generic drug development, including prior investments in companies such as Pharmathen, which enabled the firm to identify Synthon as a market leader with standout potential, supported by long-term growth tailwinds, strong leadership, and first-rate research capabilities and infrastructure.

Building on the work of Synthon’s founders, and working closely with management, BC Partners invested heavily in complex technologies to expand Synthon’s manufacturing capabilities and drive the business into new geographies, including additional US and Middle Eastern markets. Additionally, BC Partners helped to identify the white space in core markets, particularly the company’s B2B operations.

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Building a better business

Doubling down on Synthon’s commercial and operational excellence, R&D, and technological differentiation, BC Partners successfully worked alongside management to:

Facilitate investments in industry-leading R&D capabilities, to support Synthon’s capabilities for increasingly complex generics.
Internationalise the business through multiple partnerships and R&D investments, which drove expansion in the US and Middle East geographies – topped by securing a rare FDA single first-to-file in the US for Palbociclib (blockbuster cancer drug).
Strengthen the business development teams, permitting pricing optimisation and a renewed company culture of ‘continuous improvement’.
Help Synthon to adapt to the demands of increasingly complex generics by significantly strengthening the management team with the hiring of a new CEO, CCO and COO, and independent Chairman – each of whom were instrumental in the transformation of the business.

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Our results together

Under BC Partners’ active ownership, Synthon expanded rapidly, more than doubling EBITDA organically, with growth generating over 80% of returns, underpinned by strong EBITDA margin expansion.

In 2024, Synthon was sold to Goldman Sachs Alternatives, who acquired a majority stake in the company. As part of the transaction, BC Partners retained a minority stake in the business, demonstrating its ongoing commitment to Synthon’s growth and performance.