Privately-held German generic drugmaker Dermapharm has attracted interest from buyout groups in a potential 1 billion euro ($1.1 billion) deal after being put up for sale by its founder, people familiar with the matter said.
Dermapharm’s owner and chief executive Wilhelm Beier has appointed advisory boutique Ferber to find a buyer for the company, which makes skin disease treatments, allergy drugs, dietary supplements and suntan lotion.
Private equity groups such as Cinven, BC Partners, Nordic Capital, Advent and Carlyle have submitted preliminary bids valuing the company at up to 1 billion euros including debt, or 12 to 13 times its annual earnings before interest, taxes, depreciation and amortization of about 80 million euros, the sources said.
Dermapharm, Ferber and the private equity groups declined to comment.
Definitive bids for the company, based in Gruenwald, near Munich, are due by year-end after the seller recently supplied some additional information on the company’s performance.
Mergers and acquisitions in the healthcare sector has seen a bumper year in 2015 with big deals like Pfizer’s acquisition of Allergan grabbing headlines and the sector accounting for 9 percent of all deals globally.
Private equity groups have also been active buying healthcare assets. In Europe, Charterhouse bought French pharmaceuticals company Cooper and Cinven acquired laboratory groups Synlab and Labco.
People familiar with the Dermapharm auction said that private equity groups view the generics portfolio as attractive but care less about the group’s business in the so-called parallel trade of drugs, which they regard has having little growth potential.
This could become a sticking point in price negotiations with the suitors, the sources said.
Some healthcare distribution firms make money by re-labelling and re-importing specific drugs from a country were these products sell at lower prices, without the explicit consent from the drugmaker.
By Arno Schuetze (Editing by Ludwig Burger; Editing by Greg Mahlich)
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