Apotex, founded by the late Barry Sherman, sold to New York firm SK Capital

The generic drug powerhouse built by murdered Canadian billionaire Barry Sherman has been sold to a New York private equity firm. The value of the deal was not disclosed and regulatory approval is pending.

SK Capital, which specializes in the pharmaceutical sector, announced on Wednesday that it has reached an agreement to acquire Apotex Pharmaceutical Holdings Inc.

« Apotex is a dynamic and entrepreneurial company with a strong track record of success, underpinned by its diverse product portfolio, strong pipeline of new launches and iconic brand, » said Aaron Davenport, managing director of SK Capital. “We feel incredibly privileged to have the opportunity to support Apotex with our extensive experience in the pharmaceutical industry as it continues to research, develop and produce safe and affordable medicines for patients in Canada, the United States and around the world.

Sherman founded the company in 1974. Apotex is privately held and details of its revenues and profits are not publicly available. In 2021, Bloomberg estimated, based on information from sources, that Apotex generated $400 million in annual earnings before interest, taxes, depreciation and amortization. Other industry sources told the Star that at the time of death, earnings were nearly $1.6 billion. Parts of Apotex, including its European division, were sold shortly after Sherman’s assassination.

Sherman and his wife, Honey, were found dead just before noon on Dec. 15, 2017, in their basement pool room. They had both been strangled with a thin ligature and posed in a seated position on the edge of the pool, leather belts wrapped around their necks and attached to a low railing that prevented their bodies from falling into the pool. The Shermans were killed 36 hours earlier, shortly after returning home separately from a meeting at Apotex to talk with builders about a new home they were about to build.

The Toronto homicide has numerous people of interest and one suspect (a mysterious « walking man » spotted near the Shermans’ home at the time they were murdered) but has made no arrests.

Jeff Watson, President and CEO of Apotex, said, « We are delighted to be working with SK Capital, whose industry expertise and resources will help us increase our market leadership and maintain our aim to improve access to affordable, high-quality medicines for millions of patients around the world. .”

With the deaths of their parents, Barry and Honey’s fortune passed equally to their four children, Lauren, Jonathon, Alexandra and Kaelen, according to estate documents released following a lengthy legal challenge by the Toronto Star. Inside sources the Star interviewed say Sherman’s wealth — spread across the country and the world in various real estate and corporations — is close to $10 billion. Apotex is only part of Sherman’s fortune.

Closing of the transaction is subject to satisfaction of customary regulatory conditions, SK Capital’s press release said.

In the release, SK Capital says its extensive portfolio of businesses generates revenues of approximately $16 billion (US) annually, employs more than 20,000 people globally and operates 203 plants in 32 countries. The company currently has approximately $6.6 billion (US) in assets under management, the statement said.

A spokesperson for Apotex did not immediately respond to questions from the Star.

In the SK release, Apotex is described as a “proudly Canadian global pharmaceutical company that produces affordable, high-quality medicines for patients around the world.” At the time of Sherman’s death, it employed 11,000 people worldwide, many of them in Canada. SK’s statement notes that (nearly five years after Sherman’s death) it employs 8,000 people and « exports to more than 100 countries and territories and operates in more than 45 countries, with a significant presence in Canada, in the United States, Mexico, and India.

The SK-Apotex deal appears to have been in the works for more than a year, sources say. SK’s release notes that the « lead arrangers » are RBC Capital Markets, The Bank of Nova Scotia, HSBC and Truist Securities.

One hurdle that sources said needed to be overcome related to US price-fixing allegations against Apotex and numerous other companies. As the Star reported last year, Apotex has settled claims with the State of Texas and the US government and paid nearly $100 million (US)

More Star coverage of the nearly five-year-old murder investigation can be found here.

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