Francisco Mendoza
Advisory, Board Member and Investor for the Pharma, Health and Personal Care Industry
Ascendis Capital
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View from the Top

Investment Platform Looks Into Healthcare Industry

By Miriam Bello | Mon, 07/05/2021 - 12:41

Q: How can Ascendis help healthcare companies expand their operations in Mexico and abroad?

A: Ascendis Capital raises capital and invests in different industry sectors. We are in the process of developing a pharmaceutical, healthcare and beauty platform. We are searching for Mexican companies looking for growth and development within the country, as well as in the US and Central and South America.

We’ve started three projects in the healthcare sector, mainly related to food supplements, hygiene and beauty and cleaning products. We also have other sectors in mind; for example, pharmaceuticals or technology. The pandemic forced us to reinvent ourselves and opened up new opportunities in the area of technology that go hand in hand with health and personal care.

Q: How is Ascendis creating value for companies that saw their operations contract because of the COVID-19 crisis?

A: Many medium-sized companies have suffered in terms of their operating structure, growth and development. We provide an analysis or diagnosis of their situation and their growth and development potential. We accompany the shareholder throughout the process to grow their business during the next five years, which is the time necessary to align an investor's interests with those of the shareholder.

Q: How interested is Ascendis in taking these companies to the Latin American market and what strategies do you use?

A: Healthcare-related industries are projected to grow between 10 and 12 percent in the next five years, which makes them attractive to us. In terms of strategies, we have people who are analyzing the markets and looking at the business opportunities that exist in our country, the southern part of the US and Central and South America. The information we gather is analyzed by an investment committee and we review the possibilities to enter these markets. This process is done on a case-by-case basis and depends on the type of industry, the type of product and the type of client to which these products are directed.

Q: What is Ascendis’ market differentiator in the healthcare sector?

A: We do not make a simple acquisition; we provide support. We set up multiple specialists within the company's structure, whether that is sales, marketing, new product development or logistics. The goal is to ensure these companies develop efficiently, are solid and have the development potential required to succeed over the coming years.

Q: Roll-up mergers are just emerging in Mexico. What is the value of these transactions in the healthcare sector and why is Ascendis Capital the right partner for them?

A: Companies are interested in and see an added value in roll-up mergers. There are generational issues in family businesses, since the second or third generation is not necessarily interested in continuing in this type of business. This process of institutionalization allows the shareholder to make the company proactive and allows a third party to acquire it.

As such, there are no explicit regulations regarding this type of merger but the market is well aware of the process. The market has already regulated and structured the transaction process of buying and selling companies. There are indicators regarding the company’s evaluation and the structure carried out in the investment process.

Q: What does Ascendis look for in a pharmaceutical, healthcare or personal care company to begin an acquisition process?

A: We map and search for potential companies with specific needs, such as a shareholder’s exit, generational change or a need for capital investment to enhance the company's potential. After the mapping, we conduct a joint analysis of the company's structure and growth potential. That is where we identify the possible transactions to be carried out according to the attractiveness of the industry, the product, the market and the investor's appetite. Today, healthcare, pharmaceuticals and beauty continue to be of interest to investors. During a pandemic, these are defensive sectors with growth trends.

Q: What are Ascendis’ growth expectations for the health sector?

A: Our growth expectations for the next five to seven years are positive. There are interesting opportunities throughout the Americas. It is a market that has been consolidating gradually but at the same time, there are many personal care concepts that people have been developing during the last two years. The increase in the purchase of products online is also relevant. These areas are where we see the potential for the consolidation of an attractive platform for the Mexican industry.

 

Ascendis Capital is an investment platform that helps companies in Mexico and the US commercialize their products throughout North America.

Miriam Bello Miriam Bello Journalist and Industry Analyst