Capital Alliance Corp. (CAC) represented the owners of Mexico City-based Degasa, a manufacturer of medical-grade cotton products. The shareholders engaged with CAC after determining that the company’s medical gauze and cotton wool product business and its employees were best served by forging a joint venture with a partner who could provide access to the US hospital system market. At the time, Pharmed, based in Miami, Florida was searching offshore for lower-cost supplies for U.S. hospitals facing cost pressures from HMOs.
The high production volume operations of Degasa were an excellent fit for Pharmed customer demand, and powered an immediate improvement in sales volume after the transaction was completed. CAC negotiated JV deal terms that allowed Degasa shareholders to participate in the earnings upside that Pharmed realized post transaction.