Stada Agrees to $5.63-Billion Bid from Private Equity Firms

Stada Arzneimittel AG, a Bad Vilbel, Germany-headquartered pharmaceutical company, signed an investor agreement with Bain Capital, a Boston-based private investment firm, and Cinven Partners, a London-based private equity firm, in support of Bain and Cinven’s bid of EUR 66.00 ($69.93) per share to acquire Stada in a deal valued at EUR 5.318 billion ($5.63 billion).

In February 2017, Stada announced that it had opened up talks with potential bidders for the company and soon after received bids from three entitites: a EUR 58.00 ($61.44)-per-share bid from Advent International, a Boston-based private-equity firm; a EUR 56.00 ($59.32)-per-share bid from Cinven; and a EUR 58 ($61.44)-per-share bid from a third undisclosed party. Over the months since it opened itself up for acquisition bids, Stada carried out a structured bidding process and achieved an improvement in the bids, creating approximately EUR 750 million ($795 million) in additional value for its shareholders, the company said.

Stada’s decision to support Bain and Cinven’s bid comes after talks with all interested parties that bid to acquire the company. The investor agreement with Bain and Cinven would include protection provisions for employees, production sites, and the Stada corporate strategy. Stada’s executive and supervisory boards will review the offer document upon its publication, and both boards are currently expected to recommend the offer for acceptance to Stada’s shareholders.

Bain and Cinven’s EUR 66.00 ($69.93) bid per Stada share consists of the offer price of EUR 65.28 ($69.16) plus an expected dividend of EUR 0.72 ($0.76) to be paid by Stada during the offer period, which is for six weeks. The offer corresponds to an approximate 48.9% 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% premium on the volume-weighted average share price over the past three months. Bain and Cinven’s offer estimates Stada’s equity value at approximately EUR 4.109 billion ($4.354 billion) and the company’s value at about EUR 5.318 billion ($5.63 billion).

Bain and Cinven have agreed to provide both financial and strategic support for possible acquisitions to expand Stada’s product portfolio and tap new growth markets. Under the investor agreement, the location of Stada’s headquarters and of the sites of key business units will remain unchanged. Bain and Cinven have also stated their willingness to broadly refrain from business-related layoffs further than those already incorporated in the current business plans for four years.

Stada’s core business is comprised of generics, which accounted for 59.9% of 2016 sales, and branded pharmaceuticals, which accounted for 40.1% of 2016 sales. The company had 2016 sales of EUR 2.14 billion ($2.27 billion).

Source: Stada Arzneimittel AG 

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