Apax, Warburg Pincus Said to Mull Bids For Drugmaker Ratiopharm
Ratiopharm, the worlds fourth-largest maker of generic medicines, may fetch as much as 3 billion euros ($4 billion), said one of the people, who declined to be identified because the details are private. Sale advisers will probably be appointed this month, the people said.
Drugmakers seeking to expand in the growing $75 billion market for lower-priced copied medicines may also be interested in Ulm-based Ratiopharm, the people said. The Merckles are selling assets to repay about 5 billion euros of debt left after the suicide of family elder Adolf Merckle on Jan. 5.
“The generics market is attractive as it has good growth propects with the upcoming patent cliff in 2011-2012 and growing purchasing power in emerging markets,” said Britta Holt, a director at Fitch Ratings in London who specializes in the health-care industry.
Founded in 1973, Ratiopharm was Germanys first generic- drug company. It sells more than 750 versions of branded medicines, including a copy of Bayer AGs original aspirin painkiller, and competes with Novartis AGs generic-drug unit and Stada Arzneimittel AG in its home market.
Banks Competing
London-based Apax owns generic-drug companies Qualitest and Vintage Pharmaceuticals in the U.S. New York-based Warburg Pincus, with about $25 billion in assets under management, also invests in the health-care industry and holds stakes in Alita Pharma and Archimedes Pharma.
Private equity firm TPG Inc. may also consider bidding for Ratiopharm, one person said. Spokespeople for Warburg and TPG in London declined to comment, as did a spokesperson for Apax in Germany.
Buyout firms have not been active in deal-making over the past six months amid a dearth of financing for takeovers.
Announced private-equity deals dropped by 67 percent in the first three months of 2009 as buyout firms coping with losses shied away from making new commitments. Deals totaled $20 billion in the first quarter compared with $60.1 billion in the same period last year, Bloomberg data show.
Banks competing to manage the transaction include the Merckle familys lenders Commerzbank AG, Deutsche Bank AG, UniCredit SpA and Royal Bank of Scotland Group Plc.
Teva, Sanofi
Israels Teva Pharmaceutical Industries Ltd. and Sanofi- Aventis SA may also be bidders for Ratiopharm, people familiar with the situation said in November.
Teva, the worlds largest generic-drug maker, wants to increase market share in Germany and is “examining and exploring every tool to grow,” Chief Executive Officer Shlomo Yanai said in a May 5 interview. Teva has more than $2.5 billion in cash to make acquisitions and could raise more funding if necessary, Yanai said.
Sanofi spokesman Jean-Marc Podvin said the company does not comment specifically on its merger and acquisition strategy.
Merckle asset sales may also include drug wholesaler Phoenix Pharmahandel AG and cement maker HeidelbergCement AG. Ludwig Merckle, Adolf Merckles eldest son and sole heir, is seeking about 400 million euros in loans to buy time to arrange the disposals.
Vivien Kremer, spokeswoman for the Merckles VEM Vermoegensverwaltung GmbH investment unit that controls Ratiopharm, declined to comment.