Corrections or additions?
This article by Barbara Fox was prepared for the May 8, 2002
edition of U.S. 1 Newspaper. All rights reserved.
Medpointe: Deep-Pocketed Startup
One way to make a lot of money on a pharmaceutical
is to start a small one and somehow grow it big. Another way is to
buy a public company — perhaps one that is having some difficulty
— and take it private.
Anthony H. Wild, James S. Burns, and John T. W. Hawkins took the
option. They rounded up investors, acquired the health care assets
of Carter Wallace, took it private, and named it Medpointe Inc.
am not aware of anybody who has ever done what we did," says
executive vice president. "Our expectation is to return to public
market later this year or next year, as an IPO."
The Medpointe partners moved from Short Hills to the Half Acre Road
campus; their company now has 600 people worldwide, including 40 in
Princeton, and from 130 to 150 people on the Cranbury campus,
personnel from Wallace Pharmaceuticals and Wampole Laboratories. It
also has about 100 people in Decatur and 330 salespeople in the field.
Church & Dwight bought the consumer part of the company, including
the condoms, in an almost simultaneous closing. Medpointe is
with Church & Dwight on the site but plans to move this month from
Cranbury to 70,000 square feet at the former Merrill Lynch office
at 265 Davidson Avenue in Somerset. Some research will be conducted
Medpointe paid $408 million for the Carter Wallace’s pharmaceutical
and diagnostic assets, including such prescription drugs as Astelin
nasal spray, Felbaol anticonvulsive therapy, and Soma muscle relaxant.
It had raised $510 million, consisting of $225 million in debt
mostly bank loans from Bear Stearns and Lehman Brothers, and the
in equity securities.
"We survived the September 11 disaster," says Hawkins, telling
about the September 28 deal that almost didn’t happen even though
they had commitment letters. He attributes the survival to "the
fact that we were in a stable industry and our business was not
Leslie Green, the author of an article in a Thomson Financial
(www.buyoutsnewsletter.com), pronounced the Medpointe acquisition
the Middle-Market Deal of the Year. The founders made significant
personal investments, but two private equity groups, the Carlyle Group
and the Cypress Group, were the largest investors. Green quotes the
managing directors of those groups as saying they had never worked
on such a complicated, convoluted deal: "Splitting up and sorting
out the shared services and corporate infrastructure — people,
auto fleets, a corporate jet, employee termination contracts, even
telephone systems — turned due diligence into a different kind
At one point, Carter-Wallace’s adviser put the two parties in a room
and told them to figure it out for themselves. "We would not give
up, because we recognized there was a gem hidden in this company,"
says William Spiegel of the Cypress Group.
Spiegel also says that Medpointe’s management team "is one of
the best I’ve ever come across. They had operations down pat. they
knew sales and marketing. They had great relationships throughout
CEO Wild has degrees from the University of York and the University
of Cambridge (Churchill College). He spent 22 years at
including being president of that company’s Japanese operation, and
was president of the pharmaceutical sector at Warner Lambert,
the sales in four years and overseeing the acquisition of two
Wild declined to go with Pfizer in the hostile takeover, says Hawkins.
Burns has degrees from the University of Illinois and DePauw. He
at Booz-Allen & Hamilton, was group president of Becton, Dickinson
and Company, and CEO of Osiris Therapeutics, a biotechnology firm
with cell therapy for regenerating tissue. He has been vice chairman
of Healthcare Investment Corporation, and was a founding partner of
HealthCare Ventures, the VC partnership now based at 44 Nassau Street.
Hawkins grew up in Charlottesville, Virginia, where his father was
an investment banker. He stayed in his hometown to major in economics
at the University of Virginia, Class of 1976, and has an MBA from
Tuck. He has worked for Alex. Brown & Sons, and Irving Trust Company.
The idea for the deal? "I approached Jim Burns and Tony Wild about
forming the partnership in March, 2000," says Hawkins. "In
June, 2000 we began an intensive search to find one or more businesses
to build into a pharma company. We identified Carter Wallace in July,
2000 and spent 14 months raising capital and acquiring the business
with the help of our two largest private equity backers and Bear
I don’t know honestly that it had ever been done before."
He names other companies that come close. "While none of them
started with existing business, it was evident to us it was a business
model that made sense, and was just a matter of how we entered the
race. The quickest way to achieve scale was to acquire a midsize
like Carter Wallace, rather than cobbling together smaller
— Barbara Fox
08512-1001. Anthony H. Wild, CEO. 609-655-6000; fax, 609-655-6660.
"Church & Dwight has been very much on the move with the vision
of being the fastest growing consumer products in the U.S., both
internal growth and in acquisition.
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