April 10, 2017
By Alex Keown, BioSpace.com Breaking News Staff
BERLIIN – After weeks of bidding and speculation, German-based STADA Arzneimittel AG accepted a $5.6 billion takeover bid from Bain Capital and Cinven Partners LLP.
Since the announcement, shares of Stada have jumped more than 10 percent this morning, trading at 64.46 euros.
The deal ends months of speculation about what company might take over one of the last independent generic drugmakers in Europe. According to a statement issued by Stada this morning, Bain and Cinven have tendered an offer of 66 euros per share, about 5 euros higher than a bid made by an unidentified company in February. In its announcement, Stada said the offer estimates the company’s equity value at 4.109 billion euros and the company’s overall value at about 5.31 billion euros. Stada said this morning that Bain and Cinven “presented the most financially appealing offer.” The companies signed an investor agreement this morning, Stada said. That agreement includes “extensive protection provisions for employees and production sites as well as the corporate strategy,” Stada said in its statement. Bloomberg noted that Bain and Cinven agreed to protect employment contracts for four years, although some layoffs had already been planned prior to the acquisition. Those layoffs will go through as scheduled, Bloomberg said.
Bain and Cinven were not the only companies interested in taking on Stada. BioSpace previously reported that Advent International was also interested in the company. Shanghai-based Fosun Pharma was also rumored to be interested in acquiring Stada. Those multiple interests helped drive up the acquisition price of Stada by nearly 50 percent.
“The offer corresponds to an approximate 48.9 percent premium in relation to the share price on December 9, 2016, the price reached before the first specific rumors about a takeover surfaced, and an approximate 19.6 percent premium on the volume-weighted average share price over the past three months,” the company said in its statement.
James Vane-Tempest-Tempest, a London-based analyst for Jefferies, said the Bain and Cinven offer are “very generous to Stada’s shareholders,” Bloomberg reported.
The acquisition marks another step in the consolidation of the generics industry. The Stada deal provides consumers with access to German and Russian markets “for over-the-counter and copycat medicines,” Bloomberg said. Stada is the maker of branded products that include cold remedy Grippostad; skincare cream Ladival; cough medicine Covonia, which is available in the United Kingdom; and sinus medicine Aqualor, which is available in Russia.
Stada was pressured into a takeover by activist investors, including Active Ownership Capital. Active has been a known critic of Stada’s leadership and engaged in a campaign to oust the company’s long-time chief executive officer, Hartmut Retzlaff, last year.
