93 Finance Monthly. Transaction Reports Can you please share some background into the transaction and your team’s role during it? Raphaël: Certain medicines and drugs are very important for the public health. All of these medicines were created through R&D conducted by ‘big pharma’ companies a long time ago, and now these companies are changing the way they operate. There is less and less R&D, for one thing. They are also no longer taking care of the marketing for these products, because the market is too small and the profit pool too limited. So they are disposing of these products, and this is an issue for patients, because they literally need these drugs to survive. The way is therefore open for smaller laboratories like Laboratoires Delbert to take over the production and marketing of these medicines at reasonable prices to satisfy the vital needs of the public. That is where they are coming from, and the two founders are dedicated to providing critical services and drugs to patients. That is why it is a pleasure to work with them, and how they convinced investors to work with them. Mathieu: Exactly. We have assisted Laboratoires Delbert for many years now. In 2013, the founders wanted to create a French leader in the essential medicine sector. As Raphaël said, big pharma is now slowing the production of pharmaceutical products which still have vital effects for the public. At least in the French pharmaceutical market, the legislation is more favourable to innovative companies, because the new products that are considered to have better effects on health can be distributed in the market for higher prices. This is why big pharma companies purchase biotechs and medtechs; they buy innovation and sell new products, so the mature products sometimes disappear despite still being beneficial for health and cheaper. Laboratoires Delbert have since become a very visible actor in the French market. This transaction showed a significant increase in valuation of the company when compared to 10 years ago, which proves that value can emerge from activities of social interest. How did your work as part of this transaction fit the profile of your law firm, and what unique skills and experiences did you use to ensure its success? Mathieu: I have historically worked with Laboratoires Delbert because taxation is very complex in France. They also generate R&D tax credits, so we assist them in this area. In the framework of this private equity transaction, I worked on the tax aspects of the management package and other tax aspects in relation with the founders. It is quite a complex secondary LBO with many investors and different types of securities, requiring a lot of post-transaction structuring. Tax issues are very prevalent in France for companies, individuals and investments, and the client requires that tax aspects be handled carefully, in full compliance with the law. An Interview With RAPHAËL CHANTELOT & MATHIEU SELVA-ROUDON Partners at LPA-CGR avocats
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