Nycomed joins list of private companies up for sale


Reports claiming that Nycomed is seeking a buyer adds the Swiss-based specialty pharma company to the growing list of significantly sized private healthcare companies that are supposedly on the “for sale” list.

The news followed claims last week that closely-held US dermatology group, Stiefel Laboratories, was seeking buyers, in a deal that could be worth $3bn. Last year, CLS bid $1.3bn for Talecris Biotherapeutics, another substantial private company take out should it complete. What all three have in common are private equity stake holders.

The proximity of three big private company sales could be a coincidence. However, with many investors keen to shore up cash balances, the pressure to exit past investments is probably as intense as it has ever been.
In August last year Talecris was sold by its private equity owners, Cerberus Capital and Ampersand Ventures, to CSL following an aborted IPO attempt the previous year. Its private equity owners were clearly very keen for an exit.

A similar situation could be emerging with Nycomed, which is owned by four financial institutions.
Unlike Talecris and Nycomed, Stiefel is still majority owned by the founding family; Blackstone owns a minority stake following a $500m investment in 2007.

Credit crunch

There are also privately owned generics groups currently on the block, although for different reasons. Actavis from Iceland and Germany’s Ratiopharm are up for sale through necessity rather than choice; their billionaire businessmen owners, crippled by the credit crunch, need to pay down debt.

Actavis has been on the block since last year, and it is thought that the price tag has been lowered in an attempt to attract bidders. The group may even break itself up.

Last year, the group was valued at €6bn, more recently valuations closer to €4bn have been mooted.
Entrepreneur Bjorgolfur Thor Bjorgolfsson took the group private in 2007, and built the group up through acquisitions, but was ham-strung by debt after the Icelandic financial system collapsed last year.

Ratiopharm, the German generics group owned by the Merckle family, is up for sale following the collapse of the business empire and suicide of family patriarch Adolf Merckle. Sanofi-Aventis and Teva are thought to be possible buyers, and the business has been valued at around €3bn.

Founding families

An analysis of other significant private healthcare companies reveals that few others have private equity owners, with founding families retaining controlling stakes (see table below). This could mean other than Stiefel, Nycomed, Actavis and Ratiopharm, the peak of auctions of private companies is not going to last much longer.

However, with big pharma providing ample evidence in the last few months of its appetite for deals, if any founding family was looking to take retirement, there would certainly be buyers out there. What is certain, is that private equity are unlikely to be on the buying side this time round.

Private companies and ownership
Company 2007 Rx sales ($m) Profile Shareholders (>5% Holding) Country
Boehringer Ingelheim  11,756 Boehringer Ingelheim, the world's largest privately owned healthcare company. Operation include: Prescription Medicines, Consumer Health Care, Animal Health and Industrial Customer (Fine Chemicals & Biopharmaceuticals). The Boehringer Ingelheim group of companies is controlled by C.H. Boehringer Sohn.
   C.H. Boehringer Sohn is owned by the 4th generation of Boehringer, Liebrecht and von Baumbach families.
Servier  4,799 Servier is a privately-owned pharmaceutical company based in France and ranks as the second largest French pharmaceutical company worldwide. Controlled by Jacques Servier, M.D (Chairman). Total shareholding not available. France
Nycomed  3,852 Nycomed is a private European specialty pharmaceutical company based in Zurich, Switzerland. Markets a range of organic and in-licensed products across Europe & Russia. Subsequent to its €4.6bn 2006 acquisition of Altana Pharma the group gained R&D functionality and vastly increased its group sales and geographic coverage. Nordic Capital held 39.9% (31 DEC 2007).
   Credit Suisse (DLJMB) held 24.2%  (31 DEC 2007).
   Coller International Partners held 9.0% (31 DEC 2007).
   Avista held 6.1% (31 DEC 2007).
Menarini  3,025 Menarini is a privately-owned pharmaceutical company based in Italy.

Alberto Aleotti: Majority shareholder
   Menarini Family: Minority shareholding
Actavis  1,866 Icelandic generics group, now up for sale.  24 JUL 2007: Novator (an investment firm owned by Bjorgolfur Thor Bjorgolfsson, Actavis's Chairman) completed its acquisition of Actavis for approximately $4.6 billion (€ 3.4bn or €1.075 per share); Actavis de-listed from OMX Nordic Exchange. Iceland
Grünenthal  1,160 Grünenthal, a German privately-held pharmaceutical company focused on treatments for pain and contraception.
Unconfirmed Germany
Talecris Biotherapeutics  1,148 Talecris Biotherapeutics, a North Carolina based private biotechnology company, created in April 2005 upon the acquisition of Bayer's plasma products business. In the process of being bought by CSL for $1.3bn from its private equity owners, Cerberus Capital and Ampesand Ventures USA
Ratiopharm  1,137* German generics group owned by the Merckle family Owned by Merckle family's VEM Vermoegensverwaltung; up for sale amid pressure from creditor banks after collapse of Merckle business empire Germany
Ferring Pharmaceuticals  1,096 Ferring, a Switzerland-based private pharmaceutical company, focused on urology, obstetrics & gynaecology, gastroenterology, and endocrinology. Dr Frederik Paulsen Foundation 100% (15 MAY 2006). Switzerland
Octapharma  1,031 Octapharma is a Switzerland based privately-owned pharmaceutical company specialising in plasma fractionation.  Controlled by Wolfgang Marguerre, Chairman. Total shareholding not available. Switzerland
Galderma  1,009 Galderma, a privately owned Switzerland based pharmaceutical company formed in 1981 as a joint venture between Nestlé and L'Oréal. It is focused on dermatology products. Ownership:
   50% Nestlé
   50% L'Oréal
Leo Pharma  965 LEO Pharma is a privately-held Denmark based pharmaceutical company focused on dermatological diseases.

LEO Pharma is wholly-owned by the non-profit organisation LEO Foundation. Denmark
Chiesi  900 Chiesi is a privately-held Italian pharmaceutical company focused on respiratory, cardiovascular and musculoskeletal therapy areas. 100% Chiesi family owned. Italy
Merz  791 Merz, a privately-held healthcare company based in Germany. Merz Pharma contributes approx. 80% to total group sales (balance of sales from Merz & Krell, a writing instrument manufacturer). Merz family own 100% of company. Germany
Purdue Pharma  770 Purdue Pharma is a privately-owned pharmaceutical company based in Connecticut. Purdue Pharma is also known as Purdue Frederick and is part of a group of associated companies including Mundipharma and Napp Pharmaceuticals. Private company controlled by Sackler family. (Purdue was acquired by Dr Mortimer D Sackler and Dr Raymond R Sackler in 1952) USA
Pierre Fabre  750 Pierre Fabre is a France based privately-held pharmaceutical company focused on ethical medicine, health products & dermo-cosmetics. Unconfirmed France
Stiefel Laboratories  695 Stiefel Laboratories, a Florida based privately-held pharmaceutical company, specialising in dermatology. Majority owned by Stiefel family, private equity firm Blackstone bought a minority stake for $500m in 2007.  USA
Axcan Pharma  349 Axcan Pharma (AXCA), was a Canada based pharmaceutical company that focuses on gastrointestinal disease. 25 FEB 2008: Axcan Pharma acquired by TPG Capital for $1.3bn or $23.35 per share in cash. Canada
Norgine  305 Norgine is a UK based privately held specialty pharmaceutical company involved in developing & marketing of pharmaceutical products focused on gastroenterology, hepatology, incontinence and pain management. Privately owned; Peter Stein, a grand-nephew of the founder, is chairman.  United Kingdom
*Fiscal 2008

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