The Strategist

German Stada accepts Bain Capital and Cinven Group's offer

04/10/2017 - 16:01

German pharmaceutical company Stada Arzneimittel AG accepted an offer to purchase from consortium of private investment funds Bain Capital LLC and Cinven Group Ltd., according to MarketWatch. The deal will amount to more than $ 4 billion ($ 69.90, 66 euros per share) plus a dividend of € 0.72.
The Board of Directors and the Control Commission agreed to accept the offer to buy a 100% stake in Stada at a price of 66 euros per share. "We are pleased that we were able to raise the market value from about 4.7 billion euros to 5.3 billion euros to 7.28 euros per share, and now we have negotiated better conditions for our shareholders", the company's chairman of the control committee, Ferdinand Oetker, said in the release. 

The sum significantly exceeds amount of Cinven’s previous offer (56 euros per share).

Stada has received two bids in the bidding process. According to members of the Supervisory and Executive Councils of Stada, offer of Bain Capital and Cinven met interests of the company and turned out to be the most attractive from the financial point of view.

Stada signed an investment agreement with the consortium, which contains provisions aimed at protecting workplaces, manufacturing enterprises and the company's corporate strategy.

The company noted that both councils will recommend shareholders accept the consortium's proposal.

Bain Capital and Cinven have repeatedly shown interest in pharmaceutical assets. In 2012, Cinven acquired two British pharmaceutical companies - Mercury Pharma ($ 732 million) and Amdipharm ($ 590 million). Subsequently, these companies were merged into one - Amdipharm Mercury, which, in turn, was purchased in 2015 by Canadian pharmaceutical company Concordia Healthcare for $ 3.5 billion.

Previously, Stada has been protected from acquisitions by veto of its former CEO Hartmut Retzlaff, who left the company for health reasons.

According to published updated reports, Stada’s revenue in 2016 grew by 1% compared to 2015 and amounted to 2.14 billion euros, EBITDA decreased by 4%, to 361.5 million euros. The same figures adjusted in accordance with the exchange rate and portfolio changes were slightly better: revenue increased by 3% to EUR 2.17 billion, EBITDA increased by 2%, to EUR 398 million. The profit fell by 22%, to 85.9 million euros, adjusted profit increased by 7%, to 177.3 million euros.

In general, the company's performance remained at the same level, despite the difficult economic situation in the world, the report says.

The Executive Council also said that Stada has prepared its new Stada Plus program, which will increase the operating profit by almost 50% in just three years. The company’s management predicts that in 2017 adjusted revenues will amount from EUR 2.28 billion to EUR 2.35 billion, adjusted EBITDA - EUR 430-450 million, adjusted net profit will rise to EUR 195-205 million.

Stada Arzneimittel AG is a German pharmaceutical company, headquartered in the city of Bad Vilbel in Hesse. The company focuses on non-proprietary products with active pharmaceutical ingredients.