(Bloomberg) -- Buyout firm GTCR is in advanced talks on a potential acquisition of German generic drugmaker Stada Arzneimittel AG, people with knowledge of the matter said.
GTCR is seeking to hammer out terms of a deal after rival bidder Clayton Dubilier & Rice dropped out of the race, the people said, asking not to be identified because the information is private. It has been discussing a valuation of roughly €10 billion ($11 billion) for Stada, the people said.
Stada’s private equity owners Bain Capital and Cinven could reach a final agreement as soon as this month, the people said. A deal is still contingent on GTCR completing its final due diligence and securing the necessary financing, they said. It could rope in some other institutional investors to join its consortium, according to some of the people.
Private equity firms have been pouring money into generic drugs as large pharmaceutical companies focus more on developing treatments for rare diseases. Any transaction would add to the $180 billion in health care deals announced this year, according to data compiled by Bloomberg.
Bain and Cinven agreed to buy Stada for €5.3 billion in 2017, a deal that gave them control of one of Europe’s last independent generic-drug businesses. Stada, which was founded in the late 19th century, is based in Bad Vilbel near Frankfurt and makes products including Snup, Nizoral and Grippostad. The company started trading on the Frankfurt Stock Exchange in 1997 and was delisted in 2020 after Bain and Cinven completed the take-private.
Stada’s private equity owners have grown the business through several acquisitions including consumer health and skin care brands from GSK Plc, and the prescription and consumer health business of Biopharma Ukraine. It also bought a portfolio of products from Japan’s Takeda Pharmaceutical Co.
A sale of Stada would mark one of the biggest health care transactions in Europe and comes as dealmaking starts to slowly pick up. French drugmaker Sanofi SA is looking to separate its consumer health division, which has attracted offers from private equity firms. A deal could value the Sanofi unit at as much as €15 billion, Bloomberg News has reported.
Deliberations are ongoing and Stada’s owners could still pursue other alternatives like an initial public offering if they can’t reach an agreement, the people said. Representatives for GTCR, Bain, CD&R, Cinven and Stada declined to comment.
Chicago, Illinois-based GTCR manages $40 billion, according to its website. The firm focuses on investing in companies in business and consumer services, financial services, health care and technology as well as media and telecommunications sectors.
--With assistance from Ryan Gould.
(Updates with industry context, company history from fourth paragraph)
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