Stada’s $5.6-Billion Buyout by Private Equity Groups Fails
Stada Arzneimittel AG, a Bad Vilbel, Germany-based generic and over-the-counter drug company, reports that the proposed acquisition of the company by two investments firms did not receive the required shareholder votes, and as a result, the takeover offer was terminated.
Nidda Healthcare Holding AG, the acquiring company of Bain Capital and Cinven, the two investment firms pursuing Stada, reported that following an extended acceptance period ending June 22, 2017, the minimum acceptance threshold for Stada shares needed for public takeover had not been reached. Only 65.52% of the Stada shares outstanding had been tendered under the takeover offer despite a reduction from the original threshold from 75% to 67.5%.
In April 2017, Stada 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: note reflects exchange rates at time of proposed acquisition). The investor agreement with Bain and Cinven included protection provisions for employees, production sites, and the Stada corporate strategy.
Stada said that the end of the takeover offer will have no effect on its growth targets for the current financial year, and that it will continue to implement various initiatives under its Stada Plus growth program. The aim of these initiatives is to strengthen the segments of generics and branded products, to tackle the potential of new and existing markets, to reduce the complexity of the company’s portfolio and its organizational structure, and to improve its cost base.
Stada’s decision to support Bain and Cinven’s bid came after Stada had announced in February 2017 that it had opened up talks with potential bidders for the company. It soon after received bids from three parties: 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. Stada then carried out a structured bidding process and achieved an improvement in the bids with the Cinven/Bain Capital offer.