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German drugmaker Stada to be sold for over US$5 billion Posted 02/06/2017

After months of discussions, German generics firm Stada has announced that it will be sold for US$5.63 billion to private equity firms Bain Capital and Cinven.

Stada is the only independent generics producer in Germany. The company also produces branded drug products, including its Grippostad (paracetamol/caffeine/phenylephrine hydrochloride) cold medication and Ladivalsun protection lotion, and employs over 10,000 people.

Rumours of a takeover first emerged in December 2016. Following months of talks, the Executive and Supervisory Boards of Stada look set to accept offers from investment firms Bain Capital and Cinven. Offering Euros 66 per share, Bain and Cinven presented the ‘most financially appealing offer’, according to Stada. Their offer estimates Stada’s equity value at approximately Euros 4 billion and the company at over Euros 5 billion.

The investor agreement was signed on 10 April 2017 and commits Bain and Cinven to protect Stada’s employees, production sites and corporate strategy. The investment firms have also agreed to provide financial and strategic support for future acquisitions in order to expand Stada’s product portfolio and target new markets. The company’s headquarters and key business units will stay put, and staff layoffs (beyond those already in the business plan) will be avoided for at least four years.

Stada had previously received offers from Advent International and Permira, but the drugmaker continued to seek other offers, boosting its sales forecast and implementing cost-cutting measures in order to encourage higher bids. This tactic certainly paid off. Stada commented that they are pleased with their negotiating strategy, which increased transaction value from Euros 4.7 billion to more than Euros 5.3 billion, creating approximately Euros 750 million in additional value for their shareholders.

The offer document will be released pursuant to the provisions of the German Securities Acquisition and Transfer Act and following approval by the German Federal Financial Supervisory Authority. Although Stada’s Executive Board must agree the transaction, it is highly likely that they will recommend shareholders to accept the offer.

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Source: Stada

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