Stephen Saad, founder and CEO of SA's biggest pharmaceutical manufacturer, Aspen Pharmacare, denies it overpaid for acquisitions it is having to sell to get itself out of a R53bn debt hole and regain the battered confidence of its investors."We've bought and sold pretty well," he says.In the process, the share price plunged from a high of R448 in 2015 to R65 three months ago, and its debt levels raised fears it would breach its debt covenants.It is selling its Japanese business to Novartis for R6.5bn, following the sale of its infant-milk business to French company Lactalis."It's a very painful process to have to go through on a public stage," says Saad.The acquisitions were necessary for the company to globalise, says Saad, a 55-year-old chartered accountant who started Aspen in Durban 21 years ago and made a fortune manufacturing generic antiretrovirals (ARVs) for HIV/Aids patients."To compete seriously in this business you have to globalise, particularly if you're in commodities like ARVs."In a market where it was unchallenged for years, it now has 15 multinational competitors."We had to ask, do we want to be a regional player and be squeezed out by people who use this as a market of many, and are able to use capacity?"It needed to build scale and get into technologies that would make it internationally competitive.It embarked on a rapid expansion drive which left it with a global presence in 70 countries, 23 manufacturing facilities in six continents and unsustainable debt, which Saad says is partly a reflection of the fact it paid cash for its acquisitions."We've never issued equity for any acquisitions. We pay cash, and then we have to repay."He admits Aspen was stretched, but not overstretched."Why we stretched to where we did was to acquire brands, largely anaesthetics and some coagulants, and get ourselves into globally leading positions."Outside of the US, it is "No 1" in anaesthetics and "No 2" in injectable anticoagulants, he says. The volumes enabled it to be a global player in the manufacture of sterile products, an enviable space to be in because of its high barriers to entry.He's acutely sensitive to criticism that Aspen overpaid."There were a lot of comparisons between Aspen and companies in the US that made acquisitions in speciality pharmacare and had overpaid. People made an assumption that maybe we had overpaid too."But you've got to see the underlying value, what people are prepared to pay for these assets, as you can see from what we achieved in Japan. Look what we paid for our infant-milk formula business and how many billions of rands we made out of it."So why did the return on invested capital in these assets halve?"There's no way you can invest without decreasing returns. But we don't invest for a half or a quarter."If Aspen had listened to analysts and commentators, it wouldn't be the world player it is, he says."When we bought SA Druggists, people advised against. It was like swallowing the elephant. We swallowed the elephant. Don't go to Australia [they said], you'll end up like all the retailers and other South African companies that have failed. We got to No 1 in Australia."What we're going to end up with is a globally competitive business with sustainable margins, fantastic intellectual property, intangible assets, plus fixed assets."What about the crippling debt and sell-offs?"None of this is unplanned. We knew we were going to have to sell."So the desperately uncomfortable position he admits to was all planned?"There's never a comfortable position when you metamorphose. It was an uncomfortable position when we had R800m of SA Druggists. It was an uncomfortable position in Australia."Share price?Measure him by his results, he says. Debt has dropped from R53.2bn at the end of December to R39bn, and by June it is "likely" to be under R30bn."Those people who said we were going to do a rights issue, we were in trouble, they were wrong, weren't they? I told them there'd be no rights issue, I told them the assets were worth a lot more than we paid, and we've demonstrated it in the latest transaction [in Japan]."He says the challenges of playing in the global pharmaceutical space are frightening.Did he underestimate them?"We got some things wrong. We certainly haven't performed in Europe at the level we would have wanted. In China we inherited brands and companies that were declining in double digits and are now growing in double digits. We've had fantastic successes in Latin America."We've learnt a lot in the process."There are going to be more sell-offs, he says, but nothing like the major territorial divestments in Japan."We're getting ourselves into a space which is absolutely manageable."They'll soon be ready for further acquisitions, "and now we know exactly what works for us and what territories we can and can't perform in".And how to play by the rules.He's been hit by fines from UK and Italian authorities for anti-competitive behaviour and excessive pricing of cancer drugs, and ongoing investigations by the European Competition Commission for steep price hikes of off-patent cancer drugs acquired from GlaxoSmithKline."There are huge regulatory issues in our business, it's highly regulated. You learn with each experience. It's a tough industry. But because of those barriers to entry, if you get it right it's very rewarding. If you get it wrong you're in trouble."He says he's "not worried if we're the darlings of the JSE or not"."We're an entrepreneurial company, we're not going to do things the standard way, we're contrarian in our approach."But he concedes that Aspen's current share price of about R115 makes it vulnerable to a foreign takeover bid."We've had so many inquiries. There are a lot of people out there who would want to acquire Aspen at its current price and shareholding."They'd better be ready for a scrap, he says...