Leverage-to-Ownership Flywheel

“People have said to me that the deal could have sunk Deutsche Bank. It was my deal – and I put my hand up clearly for it – but the multiples that it was pitched at now look nothing short of staggering. We put in 12 times leverage and 5 times equity, with the result that Europe’s second-largest generic drugmaker was valued at 17 times its underlying EBITDA. Why did we value Actavis so highly? Well, it was the height of the stock market bubble and I was full of hubristic ambition. The company was growing strongly and I thought the buy-out was a great deal. Actavis was going from strength to strength so I would take it private, sell it in two to three years’ time and make three times my investment. I thought I would end up making more than €2 billion on the deal – my best return ever.”

“In the meantime, I had become involved in other privatisations. Almost by accident in 2003, shortly after I moved to London, I received a call from Advent International, a private equity group. ‘Thor,’ they said. ‘We know you from the brewery financing talks in Russia. We’ve watched what you did there and are kicking ourselves for not having invested but here’s another opportunity. We’re bidding on a privatisation of the major Bulgarian telecoms company BTC. We remember you were in a privatisation in the pharmaceutical industry in 1999 in Bulgaria. We’ve got another investment. Would you like to co-invest with us?’”